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Lumentum rises as Trump prepares curbs on Chinese data center components
The optical networking supplier is positioned to benefit if U.S. hyperscalers shift toward alternative transceivers, after its latest fiscal Q3 showed record revenue of $808.4 million.
Lumentum Holdings jumped after news that the Trump administration is preparing to restrict U.S. imports of new Chinese data center components, with optical transceivers singled out, according to Yahoo Finance citing Reuters.
The FCC is working on measures aimed at limiting Chinese-made equipment in critical AI infrastructure, a potential tailwind for companies whose optical components help move large volumes of data inside AI data centers. Yahoo Finance notes that restrictions could push U.S. hyperscalers to consider alternatives such as Lumentum and Coherent.
Shares have been buoyed by AI networking demand, including commitments tied to Nvidia's AI infrastructure push, the outlet said. It also pointed to Chinese supplier Zhongji Innolight's role in the optical transceiver market as a factor that could create additional opportunities for Western suppliers.
On fundamentals, Yahoo Finance highlighted that Lumentum posted record fiscal Q3 revenue of $808.4 million, with GAAP net income of $144.2 million and non-GAAP net income of $225.7 million, or $2.37 per diluted share, alongside expanding gross margins. The story also said the stock remains valued at a premium, trading at a trailing P/E above 160 and a forward P/E above 50.