Matt Frankel

NVIDIA just made a $2 billion direct investment in Lumentum.

Lumentum announced a brand new facility that it's building that should be online in 2028 that is directly related to its partnership with NVIDIA.

They're gonna be providing the demand for it.

It's like building a factory and you already have someone who's buying all the products.

So that bolstered its already cash-rich balance sheet.

Lumentum now has over $3 billion of cash just sitting around.

It solidified that partnership between NVIDIA and Lumentum, which is honestly its most important customer.

And its guidance calls for 22% sequential growth in the current quarter.

So things aren't slowing down just yet.

So this was a very strong report, and I completely see why the market reacted the way it did.

Yeah, so this has been more than a 10-bagger in a year, like you correctly point out.

But I would counter and say that this is not the same business it was a year ago.

And by the way, if you've never heard of Lumentum back when it was primarily a telecom networking company, it was part of JDS Uniphase.

So maybe you've heard of that.

So it was a spinoff.

So let me tell you a quick story.

So about a year ago, Lumentum set a long-term target that they plan to get to, quote, eventually of $3 billion in annualized run rate revenue and a 20% operating margin.

It wasn't even close to that a year ago.

Now, fast forward a year to now, Lumentum has $3.2 billion of annual recurring revenue and a 32% operating margin.

It has already surpassed its long-term targets in a year.