Summary of Conference Call Notes Industry Overview - The focus is on the North American CSP (Cloud Service Provider) capital expenditure, which is experiencing strong growth. The report emphasizes the importance of the CPO (Coherent Photonic Optics) and fiber optic industries [1][2]. Key Points 1. **Acceleration of CPO Development** - Lumentum has announced that it has secured several hundred million dollars in orders related to CPO. - Expected revenue from CPO is projected to be approximately $50 million in Q4 2026, with a significant surge anticipated in the first half of 2027. - The report suggests paying attention to the CPO supply chain, including components such as optical engines, FAU, laser ELS, MPO, shuffle boxes, and polarization-maintaining fibers. - Relevant companies in this space include Tianfu Communication, Yuanjie Technology, Shijia Photonics, Taicheng Light, Changfei Fiber, Changying Tong, and Robotek [1][2]. 2. **Fiber Optic Industry Transition** - The fiber optic cable industry has shifted from recovery to a phase characterized by "tight supply and simultaneous increase in volume and price." - As a capital-intensive industry, it is expected that new capacity will be difficult to add in the short term, leading to continued price increases. - Companies with optical fiber rod production capacity, such as Changfei Fiber, Hengtong Optic-Electric, Zhongtian Technology, and Fenghuo Communication, are recommended for focus. - Additionally, companies with significant fiber optic capacity or specialized fiber optics, such as Tefa Information and Changying Tong, are also highlighted [2]. 3. **Strong Capital Expenditure Growth Among CSPs** - Four major North American CSPs are expected to maintain strong capital expenditure growth through Q4 2025, with optimistic guidance for future capital expenditures. - All companies expressed a consensus on the "strong demand for AI and tight supply of computing power." - The overseas AI computing power supply chain is viewed positively, while the domestic AI competition is ongoing, with issues such as traffic congestion during Alibaba's Qianwen event noted. - Attention is also recommended for the domestic computing power supply chain [2]. Additional Recommendations - The report recommends specific companies for investment consideration: Zhongji Xuchuang, Tianfu Communication, Changfei Fiber, Hengtong Optic-Electric, Zhongtian Technology, and Yuanjie Technology [3].

智通财经APP获悉，"谷歌TPU AI算力链"的最核心参与者，同时也是"英伟达AI GPU系AI算力链"不可 或缺光模块组件供应商的Lumentum(LITE.US)自从公布强劲季度业绩与未来展望之后，看涨该公司股价 强劲延续2025年牛市轨迹的金融机构可谓越来越多。Lumentum全年股价涨幅高达340%——乃全球股 市毋庸置疑的AI算力主题"超级大牛股"，今年以来股价已经涨超56%。 这家总部位于美国的光模块技术领军者，堪称是"谷歌TPU vs 英伟达GPU"这场可能持续多年交锋的"最 强受益主题之一"，两者强强抗衡或者某一方进入绝对领先优势，对于光模块主题而言都是长期利好。 来自GF Securities的资深分析师Jeff Pu在最新发布的研报中表示，Lumentum将能够从"AI芯片超级霸 主"英伟达(NVDA.US)加速使用共封装光学技术(即CPO)大趋势中持续受益。 据中心各种光模块和光通信系统中。 上周Lumentum公布的最新业绩报告显示，得益于光路交换机(OCS)和CPO领域的持续强劲需求， Lumentum不仅交出了一份营收与实际利润双超预期的成绩单，更给出了高达85%同比增长的下季度指 ...

Core Viewpoint - The optical communication sector is experiencing strong momentum, driven by the acceleration of artificial intelligence and data center construction, with significant growth projected for 2025 [1] Company Performance - Credo Technology (CRDO.US) increased nearly 8% - Lumentum (LITE.US) rose 6%, reaching a new historical high - Corning (GLW.US) gained over 5% - Ciena (CIEN.US) saw a 4% increase [1] Market Growth Projections - According to Cignal AI, the optical device market revenue is expected to reach a historical high in 2025 - The revenue for the data communication segment is projected to exceed $18 billion - Optical module revenue is anticipated to approach $6 billion - From 2024 to 2029, the data communication optical module market is expected to grow at a compound annual growth rate (CAGR) of over 20%, reaching nearly $29 billion by the end of 2029 [1]

Core Viewpoint - The artificial intelligence (AI) infrastructure boom continues, with Lumentum experiencing significant growth in revenue and profitability, driven by its essential role in AI and cloud computing systems [1][3]. Group 1: Financial Performance - Lumentum's revenue increased by 65.5% year over year, reaching $665.5 million in the second quarter of fiscal 2026 [3]. - The company's adjusted net income surged by 380% to $143.9 million, translating to $1.67 per share, exceeding Wall Street's expectations of $1.41 per share [5]. - The adjusted operating margin improved by 17 percentage points to 25.2% [5]. Group 2: Future Projections - For the fiscal third quarter, Lumentum anticipates revenue growth of approximately 85%, projecting between $780 million and $830 million [6]. - Management expects adjusted operating margins to be between 30% and 31%, with earnings per share forecasted at $2.15 to $2.35 [6]. Group 3: Market Position and Technology - Lumentum is recognized as a foundational engine of the AI revolution, with its technologies powering virtually every AI network through partnerships and as a critical component supplier [4]. - The company's optical and photonic technologies are essential for enabling faster and more efficient data transfer in AI and cloud computing systems [3].

Group 1 - Lumentum Holdings Inc. (NASDAQ:LITE) saw a significant increase of 36.02% after reporting better-than-expected second-quarter financial results and providing third-quarter guidance above estimates [1] - Saia, Inc. (NASDAQ:SAIA) experienced a rise of 23.07% as shares of transportation companies gained amid declining oil prices [1] - Westlake Corporation (NYSE:WLK) increased by 19.27% this week [2]

Core Insights - Lumentum Holdings Inc. experienced a significant stock increase of 40.87% week-on-week, reaching an all-time high due to its profitability in Q2 FY2026 [1][3] - The company reported a net profit of $78.2 million in Q2, a turnaround from a loss of $60.9 million in the same quarter last year, with net revenues rising by 65% to $665.5 million [3][5] - Lumentum's forward guidance indicates over 85% year-over-year revenue growth, driven by strong demand in optical circuit switches and co-packaged optics [4] Financial Performance - The net profit for Q2 FY2026 was $78.2 million, compared to a loss of $60.9 million in the same period last year [3] - Net revenues surged to $665.5 million, up from $402.2 million year-on-year, hitting the high end of previous guidance [3] - The revenue growth outlook for Q3 is projected between $780 million to $830 million, implying a growth of 83% to 95% from $425.2 million reported in the same quarter last year [5] Strategic Opportunities - Lumentum is focusing on two key areas: optical circuit switches (OCS) and co-packaged optics (CPO), with a backlog exceeding $400 million in OCS [4] - The company has received a multi-hundred-million-dollar order in CPO, expected to be delivered in the first half of 2027 [4] - The results underscore the strength of Lumentum's roadmaps for optical components and systems, positioning the company as critical to AI leaders [4]

Group 1 - The core story of the week highlights significant capital expenditure (capex) numbers from hyperscalers [1]

Investment Rating - The report assigns a strong buy rating for Lumentum (LITE), expecting it to outperform the benchmark index by over 20% in the next six months [32]. Core Insights - Lumentum's FY26Q2 results set a record with total revenue reaching $665.5 million, a year-over-year increase of over 65%, marking the second consecutive quarter of record revenue [3][7]. - Non-GAAP operating margin increased significantly by 1730 basis points to 25.2%, while non-GAAP gross margin reached 42.5%, up 1020 basis points year-over-year and 310 basis points quarter-over-quarter [3][7]. - The company reported a non-GAAP earnings per share of $1.67, exceeding expectations, with cash and short-term investments totaling $1.16 billion [3][7]. Revenue Breakdown - **Component Business**: Revenue was $443.7 million, with a quarter-over-quarter increase of 17% and a year-over-year increase of 68%. The growth was driven by significant demand for laser chips and components, particularly for cloud transceiver customers [8]. - **System Business**: Revenue reached $221.8 million, reflecting a 43% quarter-over-quarter increase and a 60% year-over-year increase, primarily contributed by cloud transceiver business [9]. Business Progress - **Cloud Transceivers**: The 1.6T product line is advancing beyond expectations, with profitability significantly higher than the 800G products. The company is focusing on reducing design cycles and improving yield to enhance profitability [4]. - **Optical Communication Systems (OCS)**: Orders are coming from multiple clients, with applications across four major scenarios, and expected to continue growing into 2027 [4]. - **CPO**: The company secured several hundred million dollars in orders for high-power laser chips, with deliveries expected in the first half of 2027 [4]. - **Fiber Expansion**: Targeting opportunities in data center architecture transformation, with plans to launch large-scale CPO products by the end of 2027 [4]. Earnings Guidance - For FY26Q3, Lumentum expects net revenue between $780 million and $830 million, with a midpoint of $805 million, representing over 85% year-over-year growth [10]. - Non-GAAP operating margin is projected to be between 30% and 31%, with diluted earnings per share expected to be between $2.15 and $2.35 [10].

Core Insights - UBS reported a total market value of $620 billion in Q4, reflecting a decrease of 5.65% from the previous quarter [3] - The firm made 1,347 new stock purchases and increased holdings in 4,181 stocks, while reducing holdings in 4,520 stocks and completely selling out of 1,188 stocks [3] - The top ten holdings accounted for 14.52% of the total market value [3] Top Holdings - NVIDIA (NVDA.US) is the largest holding with approximately 77.49 million shares valued at $14.45 billion, representing 2.34% of the portfolio, down 11.47% from the previous quarter [1][4] - Microsoft (MSFT.US) ranks second with about 28.04 million shares valued at $13.56 billion, making up 2.20% of the portfolio, a decrease of 7.64% [2][4] - Apple (AAPL.US) is third with around 44.55 million shares valued at $12.11 billion, accounting for 1.96% of the portfolio, down 10.57% [2][4] - Broadcom (AVGO.US) is fourth with approximately 23.77 million shares valued at $8.23 billion, representing 1.33% of the portfolio, an increase of 0.88% [2][4] - Amazon (AMZN.US) is fifth with about 34.61 million shares valued at $7.99 billion, making up 1.30% of the portfolio, down 4.57% [2][4] Notable Changes - UBS reduced its holdings in several tech stocks, including Micron Technology (MU.US) by 16.14%, TSMC (TSM.US) by 15.56%, Oracle (ORCL.US) by 1.91%, AMD (AMD.US) by 24.28%, and Western Digital (WDC.US) by 37.92% [5] - The firm slightly increased its position in Meta (META.US) by 0.85% among the "seven giants" [4] - New positions were established in Total (TTE.US) and increased holdings in Walmart (WMT.US), Alibaba (BABA.US), and Bitcoin holding company Strategy (MSTR.US) [5] Trading Activity - The top five purchases included Microsoft call options, SPDR S&P 500 ETF (SPY.US), MP Materials call options, UBS Group AG, and iShares 7-10 Year Treasury ETF put options [5][6] - The top five sales included SPDR S&P 500 ETF put options, Invesco QQQ Trust put options, iShares iBoxx High Yield Corporate Bond put options, Microsoft, and NVIDIA [5][6]

Core Insights - Lumentum Holdings Inc. (NASDAQ:LITE) achieved a new all-time high stock price of $507.55, closing at $504.42, marking an 8.35% increase on the day [1] - The company reported a net profit of $78.2 million for the second quarter of fiscal year 2026, a significant turnaround from a loss of $60.9 million in the same period the previous year [2] - Net revenues increased by 65% year-over-year, reaching $665.5 million, surpassing previous guidance [2] Financial Performance - Lumentum's revenues for the third quarter are projected to be between $780 million and $830 million, indicating an expected growth of 83% to 95% compared to $425.2 million in the same quarter last year [4] - The company’s earnings per share and profitability exceeded prior expectations, reflecting strong operational performance [2] Future Outlook - The company anticipates over 85% year-over-year revenue growth, driven by substantial opportunities in optical circuit switches (OCS) and co-packaged optics (CPO) [3] - Lumentum has a backlog exceeding $400 million in OCS and has secured a multi-hundred-million-dollar order in CPO, to be delivered in the first half of calendar 2027 [3]