Research|LITE: CEO remarks further prove that optics players have a supply problem, not demand

Lumentum CEO Michael Hurlston's comments at the Mizuho conference further strengthen our view on the optics cycle. The market is misreading the normal engineering ramp for CPO as a demand delay, but Lumentum management's message was exactly the opposite. The CEO described the current environment as a photonic supercycle within an AI supercycle and explicitly stated that Lumentum is poised to exceed $1 billion in quarterly revenue, nearly double the company's previous peak of around $500 million. More importantly, he emphasised that many of the real growth drivers have not yet fully shown up in the financials, including optical scale-up, optical scale-out and optical circuit switches. In other words, the current business is already strong, while several much larger optics growth vectors are only just beginning to unfold.