Tyler Crowe

So we wanted to get into earnings and try to get to Nathan's question as much as possible.

But this isn't probably one people have heard about a lot.

It's really one of those behind the scenes sort of businesses.

So Matt, before you dig into what was actually in the report, give us like the too long didn't read of the 10K for Lumentum as what it actually does.

When we were talking about Cisco, we were talking about a historically cyclical business that has this catalyst that is driving things.

And the Lumentum story is not any different.

I think it's actually probably just the Cisco story on steroids right now because it's even more extreme.

Right now, over the past year, shares of Lumentum are up 1,200%.

and currently shares trade for about 189 times earnings.

So definitely not the more value-oriented 26, 27 times earnings that we were talking about with Cisco here.

This is a high-flying stock that has a lot of very lofty expectations built into it, almost entirely related to AI buildup.

Because as to your point, Matt, previously, this was a business that came and went with the deployment of whatever...

Wireless protocol was the new hot thing for telecom.

When 3G was coming out, they had a lot of work.

When 4G came out and those periods in between, it was pretty dead.

So again, when we're looking at Lumentum and those amazing numbers that we just saw, how do you reconcile that with telecom?

these massive premium that you have in the stock, and does that make this a compelling investment, or is this just a, hey, this is really fun to watch, but I don't know if I want to be adding money to something like this?

looking through it myself one of the things that stood out in terms of like we see all these ai infrastructure build out numbers that are kind of overwhelming and how big they are and sometimes you look at it yeah but is this really going to do that because you know maybe it's just a commodity product or something like that one of the things that is interesting about what lumentum is doing with you know fiber optics and some of its uh

products that it sells for example to nvidia the big selling point that it has is like more compute for less power kind of making systems more efficient because you know your transfer of data from one place to other it just makes it more efficient and this is something i've been kind of harping on and as we've had these discussions too is the idea of like the way that we are growing the consumption whether it be power water uh just usage of ai it

on its current path, it seems unsustainable.