Why one fund exited Lumentum: CPO design choices put its AI optics exposure in doubt

zephyr_z9 · x · 2026-10-10

Investor account convequity explains exiting $LITE at the start of 3Q26 and staying out at the 4Q26 rebalance.

Lumentum supplies high-power lasers for external laser sources (ELS), but that business only grows if customers pick CPO designs that keep lasers external
Co-packaged optics puts optics in the same package as the chip: some designs keep external lasers (good for Lumentum), while others move the light source closer or replace lasers with microLEDs for short links
With design choices still open, the firm's AI optics exposure is uncertain

zephyrz9 shared the post while mocking the microLED-replaces-lasers line.

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