Lumentum: The AI Trade Isn't Dead, 90% Growth Could Prove It

Michael Wiggins De Oliveira Investing Group Leader Follow Summary Lumentum Holdings is experiencing rapid AI infrastructure-driven growth, with profitability and free cash flow improving meaningfully. I set a free cash flow estimate of $500 million for fiscal 2027. LITE's valuation remains compelling at 112x forward free cash flow multiple, given expected revenue growth rates exceeding 90% y/y in early fiscal 2027. Key risks include customer concentration (40% of business), execution on free cash flow, and sustaining >80% y/y growth rates. Looking for a helping hand in the market? Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. Learn More » your_photo/iStock via Getty Images Investment Thesis Lumentum Holdings ( LITE ) is set to report its fiscal Q4 2026 earnings on the following Tuesday. The reason why I'm bullish on LITE has less to do with being highly accurate, but rather directionally correct. A common-sense investment. This article was written by Michael Wiggins De Oliveira 52.9K Followers Follow Michael Wiggins De Oliveira is an Inflection investor. As an Inflection investor, I believe that simplicity is key to outperformance. Since 2024, Deep Value Returns is up 220% vs 75% for the Nasdaq (*as of 2 July 2026).This means buying a stock at the moment when the outlook is expected to improve over the next year. This allows one to minimize the downside, while positioning yourself at the moment when the stock is primed to perform strongly.With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outstanding professional experience in tech and energy and a following of over 40K on Seeking Alpha.Michael is the leader of the Investing Group Deep Value Returns.Features of the group include: Insights through his concentrated portfolio of Inflection stocks, timely updates on stock picks, and "hand-holding" as-needed for new and experienced investors alike. Deep Value Returns also has an active, vibrant, and kind community easily accessible via chat. Learn more Analyst’s Disclosure: I/we have a beneficial long position in the shares of LITE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.