Lumentum stock advanced on Morgan Stanley's bullish optical infrastructure outlook, with the analyst raising its price target to $520 as AI data center investments drive demand for optical components. The firm projects the optical market will expand to $65 billion（約10兆円） or more by 2028 from $30 billion（約4.8兆円） in 2025, a trajectory that positions Lumentum—a pure-play supplier of AI-driven optical infrastructure—as a key beneficiary.
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Lumentum's stock rose nearly 1% in overnight trading, heading for a fourth consecutive day of gains, as Morgan Stanley raised its price target to $520 from $420 and maintained an 'Equal Weight' rating. The firm cited faster speeds and increased investment in AI data centers as drivers for optical market growth.
Why it matters
Morgan Stanley's base case projects the optical market will grow to $65 billion（約10兆円） or more by 2028, from about $30 billion（約4.8兆円） in 2025—a significant expansion fueled by AI infrastructure demand. Lumentum supplies high-performance lasers, modules, and optical subsystems that power data center connectivity and cloud computing, positioning it as a beneficiary of this shift.
What to watch
Wall Street analysts have an average 'Strong Buy' rating, with 18 out of 22 analysts rating it 'Buy' or higher. The stock has gained nearly 859% in the last 12 months, and retail sentiment on Stocktwits is bullish.
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