Lumentum Holdings Inc. keeps drawing bigger calls from Wall Street after a March 2 announcement that NVIDIA would invest $4 billion in the optical and photonic products maker. Shares closed 11.7% higher that day, and since then the stock has climbed more than 1,400% over the past year and 114% year-to-date.
In March, BNP Paribas lifted its price target on Lumentum to $1,040 from $625 and kept an Outperform rating. Craig Hallum also raised its target to $900 from $600 and held a Buy rating. BNP Paribas said the change reflected its updated estimates for Lumentum’s progress in the optical chip industry.
The run has also spilled into the broader market narrative around data centers, where Lumentum’s gear is tied to the shift away from copper. Jim Cramer called Lumentum a very good company, saying it does fiber, operates in the data center and is part of what he described as the companies of the data center of tomorrow.
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That enthusiasm comes with a catch: the company’s share price has already moved far ahead of where it stood before NVIDIA’s investment became public. Cramer said the stake was a real vote of confidence, but the scale of the rally leaves investors weighing whether the bullish research updates are catching up to the move, or trying to keep pace with it.
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For now, Lumentum looks like one of the clearest examples of how a single strategic investment can reset expectations across an entire stock. The next test is whether the business can keep matching the market’s new assumptions.
