Lumentum Shares Drop 4.67% on $610M Volume, Down 45.87% from Prior Day's Top 500 Ranking

On August 14, 2025, Lumentum (NASDAQ:LITE) fell 4.67% with a trading volume of $0.61 billion, down 45.87% from the previous day. The company reported Q4 fiscal 2025 results showing non-GAAP revenue of $480.7 million and a 37.8% gross margin, driven by 67% year-over-year growth in cloud and networking revenue. Despite robust demand for high-speed laser components, manufacturing capacity constraints persist, particularly for 200-gig EML chips, which are expected to ship in December 2025.

Lumentum’s cloud and networking segment generated $424.1 million in revenue, fueled by record EML shipments and strong hyperscale cloud orders. The firm highlighted ongoing wafer fab expansion but noted supply shortages for laser assemblies. CEO Michael Hurlston emphasized 2026 as a "breakout year" for laser chip sales, with narrow linewidth lasers seeing six consecutive quarters of growth. New product milestones, including optical circuit switches (OCS) and co-packaged optics (CPO) partnerships, underscore long-term growth potential in high-margin photonics markets.

Margin expansion was attributed to favorable product mix, higher manufacturing utilization, and cost discipline. Non-GAAP operating margin reached 15%, up over 2,000 basis points year-on-year. CFO Wajid Ali noted $59 million in capital expenditures to support future demand. The company projects Q1 2026 non-GAAP revenue between $510 million and $540 million, with gross margin approaching 40% by late 2026. Strategic investments in U.S.-based indium phosphide wafer fabrication aim to solidify its position in emerging technologies like CPO and OCS.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to now delivered moderate returns. The 1-day return was 0.98%, with a total return of 31.52% over 365 days. This indicates the strategy captured some short-term momentum but also reflected market volatility and potential timing risks.