Lumentum: I Was Wrong, But The Nvidia Effect Has A Price (Rating Upgrade)

Agar Capital3.9K FollowersFollow5ShareSavePlay(14min)CommentsSummaryLumentum Holdings is now rated Hold, as exponential fundamentals are overshadowed by extreme valuation multiples and no margin of safety.LITE's core optical technologies are critical for AI infrastructure, with Nvidia investing $2B and securing multi-year laser supply agreements.Revenue and margins are surging—Q2 revenue is up 65.5% YoY, gross margin is at 42.5%, and EPS far exceeds estimates, but shares are priced for perfection.Execution risks, customer concentration, and dependency on Nvidia's roadmap pose significant threats if growth expectations or supply chain expansion falter. JHVEPhoto/iStock Editorial via Getty Images Mea culpa In the movie "The Big Short," Michael Burry was mathematically correct with respect to the fundamentals of subprime mortgages, but he lost money on his timing. I have a vivid memory of him standing at theThis article was written byAgar Capital3.9K FollowersFollowI’m a Portfolio manager (flexible equity funds and private clients), fundamental equity research, macro and geopolitical strategy.Over 10 years across global markets, managing multi-asset strategies and equity portfolios at a European asset manager.I combine top-down macro, bottom-up stock selection and real-time positioning (Bloomberg, models, data).I focus on earnings, tech disruption, policy shifts and capital flows — to identify mispriced opportunities before the market.On Seeking Alpha I share high-conviction ideas, contrarian views and deep breakdowns of both growth and value names.For more insights: follow me on X @AgarCapitalAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in LITE over the next 72 hours. 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.