Marvell risks paying a peak-scarcity price for Lumentum if optical supply catches up by 2028-30. The proposed ~$99B deal values Lumentum at roughly 20x guided annualized revenue and 58x estimated after-tax operating income, while Lumentum, Coherent and Chinese suppliers are adding laser capacity. The DSP-and-laser combination has strategic logic, but durable scarcity economics and Nvidia's response remain uncertain. x.com 

Lumentum's valuation is supported by Nvidia's co-packaged optics scale-out progressing faster than expected. Spectrum-X CPO switches are in mass production on better component yields, with shipments forecast at 15k in 4Q26 rising to 100k in 2027. CPO and NPO are seen contributing 12% and 26% of Lumentum's revenue in 2027 and 2028. Scale-up optical engine estimates were revised to 6.5m and 42m for 2027 and 2028, with full NPO adoption for the cycle retained. x.com 

Lumentum is a great business, but at $954 its risk/reward is not attractive. Applying 30x to fiscal 2028 non-GAAP EPS of $40 gives a 2027 price target of $1,200, about 26% upside, or roughly 15% after adjusting for execution, financial, technology and supply risks. Reaching it needs on-time manufacturing ramps, sustained pricing power and cash flow without excessive dilution. Lost pricing power plus slipping OCS or laser ramps would break the thesis; a significant dip would offer a better entry. … Show more

Applied Optoelectronics looks undervalued if its capacity converts into the modeled revenue ramp. From disclosed capacity, quarterly revenue could rise from $858M in Q1 2027 to $1.89B in Q4 and $2.14B in Q1 2028, against a $6.8B market cap. A $7.5B annualized exit rate in 2027 at 40% gross margins would make an unchanged valuation surprising. Lumentum's capacity agreements into 2030-31 suggest demand may last beyond 2027-28, but execution risk remains. x.com 

Lumentum remains attractive as its CEO says it is completely sold out through early 2029, extending his earlier 2028 horizon despite roughly 12x growth at its main Japan factory in two years. New laser capacity takes three to five years to build, and hyperscalers are helping fund expansion through long-term commitments, pointing to persistent supply pressure. x.com 

Lumentum requires paying up heavily for a company that is not yet making money. Revenue grew 109% year over year, but it trades at about 25 times annualized sales, and it is growing less than memory makers at ten times their valuation. @ZeekTyt cites Lumentum's CEO expecting to supply only about 30% of requested laser demand as CPO and NPO ramp in 2027, with balance around 2029-30. x.com  x.com 

Lumentum's 109% year-on-year growth and sold-out capacity through 2029 make selling its AI optics exposure questionable. Bloomberg reported Marvell is in advanced talks to buy it; the appeal depends on the price, especially when holders of an $80 billion Lumentum would become holders of a $320 billion-plus Marvell growing 37%. x.com 

Lumentum stands to gain as the shift from copper to light inside AI data centers accelerates. Co-packaged optics is now in mass production, per TrendForce, with Nvidia shipping Spectrum-X CPO switches. Near-packaged optics is catching on fast; Lumentum CEO Michael Hurlston says its demand looks bigger than CPO's and came sooner, now late 2027 or early 2028. He sees about $40 a share of fiscal 2028 earnings power, above Street estimates, with none of CPO or NPO in the numbers yet. x.com 

Wafer-tested VCSEL arrays could erode Lumentum's laser scarcity premium if scale-up links adopt wide, parallel designs. Lumentum's in-rack demo used arrays but does not replace every high-power laser; Credo and ams OSRAM seek approval for a parallel-link standard in 2027. Multiple suppliers would pressure pricing power and margins. Near-term earnings could still benefit from laser shortages, with Lumentum sold out through early 2029. x.com 

Owning Lumentum's laser fab could secure Marvell's FY28 supply and hedge its DSP franchise as optical links shift to CPO. The rumored deal's strategy makes sense, but short-term pain is likely: at a 30% premium, roughly $17.5B in new debt and the rest in stock, rough math puts EPS dilution near 15%. It turns accretive only if Lumentum outgrows Marvell at today's guided rates for five or six more quarters, which looks achievable while the laser shortage lasts. x.com  x.com  x.com