Why Lumentum and Roblox Are the 2 Monster Growth Stocks Poised to Hit New Highs in 2025

The tech sector is no stranger to volatility, but 2025 is shaping up to be a breakout year for two underappreciated giants: Lumentum (LITE) and Roblox (RBLX). Both companies are uniquely positioned to capitalize on the twin megatrends of AI-driven innovation and metaverse scalability, with robust revenue growth, aggressive expansion plans, and analyst price targets that suggest explosive upside. Let’s break down why these stocks could redefine what it means to “go long” in the new decade.

Lumentum: The Hidden Engine Behind AI’s Next Frontier

Lumentum isn’t just another chipmaker—it’s the backbone of the AI revolution. The company’s fiscal 2025 results were nothing short of staggering: $1.65 billion in total revenue, a 21% year-over-year surge, and a $480.7 million Q4 revenue print that handily beat forecasts [1]. This growth isn’t a fluke. Lumentum’s Cloud & Networking segment, which accounts for 84% of its revenue, is being fueled by insatiable demand for high-speed data transmission in AI data centers [1].

What’s more, Lumentum is doubling down on its AI bet. The company recently expanded its U.S. semiconductor capacity to boost production of Co-Packaged Optics (CPO), a cutting-edge technology that integrates optical components directly with silicon chips to reduce latency and power consumption [3]. This move positions Lumentum as a critical supplier for hyperscalers and cloud providers racing to build next-gen AI infrastructure.

Analysts are bullish. Citi’s Papa Sylla calls Lumentum a “Buy” with a $165 price target, projecting a 29% compound annual growth rate (CAGR) over the next three years [1]. With AI adoption accelerating and Lumentum’s margins improving (non-GAAP net income hit $0.42 per share in Q2 2025 [1]), this stock is a no-brainer for investors seeking exposure to the AI supply chain.

Roblox: The Metaverse’s AI-Powered Cash Cow

While Lumentum powers the backend, Roblox is building the frontend of the AI-driven future. The platform’s Q2 2025 results were a masterclass in growth: $1.08 billion in revenue (up 20.9% year-on-year) and 111.8 million daily active users (DAUs), a 41% surge driven by viral hits like Grow a Garden [1]. But the real story is in the bookings—a staggering $1.4 billion in Q2, up 51% year-on-year [1].

Roblox’s long-term potential lies in its AI-driven monetization tools. The company’s Code Assist and Material Generator are democratizing game development, enabling creators to build immersive experiences with minimal coding expertise [4]. Meanwhile, partnerships with Google Ad Manager and Nielsen are turbocharging its advertising ecosystem, which could unlock $1 billion in revenue over the next few years [1].

Analysts are pricing in this optimism. The consensus price target for Roblox in 2025 ranges from $62 to $175, with a “Buy” rating from most observers [4]. Even with a lofty P/S ratio of 21.5, the company’s expanding user base (64% of DAUs are aged 13 and above [1]) and diversification into Rewarded Video ads and IP licensing justify the premium [5]. If Roblox can maintain its 34-37% bookings growth this year [5], the stock could easily double by 2026.

The AI-Metaverse Synergy: Why These Stocks Are a Match Made in Heaven

The real magic happens when you layer Lumentum’s AI infrastructure with Roblox’s metaverse ecosystem. As AI models grow more complex, data centers will need Lumentum’s high-speed optical components to handle the load. Meanwhile, Roblox’s virtual worlds will rely on AI tools to enhance user engagement and monetization. This symbiotic relationship isn’t just theoretical—it’s already playing out in the market.

Consider the iShares Expanded Tech-Software Sector ETF, which has outperformed semiconductor-focused funds over the past three months [2]. Investors are clearly shifting toward software and platforms that can scale with AI, and both Lumentum and Roblox fit this mold.

Risks and Rewards

No investment is without risk. Lumentum’s GAAP net loss in Q2 2025 ($0.88 per share) [1] and Roblox’s $278.4 million net loss in the same period [4] highlight the capital-intensive nature of these plays. However, both companies are improving their free cash flow and profitability. Lumentum’s Q4 2025 net income of $213.3 million [3] and Roblox’s 58% year-on-year free cash flow growth [4] suggest these are temporary hiccups, not existential threats.

For the right investor—someone with a 3–5 year horizon—these risks are worth taking. The AI and metaverse sectors are in their infancy, and both Lumentum and Roblox are building the rails for the next phase of the internet.

Source

[1] Lumentum Announces Fiscal Second Quarter 2025 Financial Results [https://www.lumentum.com/en/media-room/news-releases/lumentum-announces-fiscal-second-quarter-2025-financial-results-0]
[2] Software-Related Stocks Have Outperformed Semiconductors Over the Past Three Months. Will It Continue? [https://spotlightgrowth.com/software-related-stocks-have-outperformed-semiconductors-over-the-past-three-months-will-it-continue/]
[3] Lumentum Stock Surge: Buying Opportunity? [https://stockstotrade.com/news/lumentum-holdings-inc-lite-news-2025_08_28/]
[4] Roblox Corporation Q2 2025 Analysis: Bookings Growth & ... [https://www.monexa.ai/blog/roblox-corporation-q2-2025-analysis-bookings-surge-RBLX-2025-08-06]
[5] RBLX - Roblox Corporation [https://www.datainsightsmarket.com/companies/RBLX]