Lumentum and Coherent Retreat 15-17% in June, JPMorgan Sees Buying Opportunity

According to JPMorgan analyst Samik Chatterjee, optical communications stocks Lumentum and Coherent retreated roughly 15% and 17% from their June highs, presenting a buying opportunity despite recent market concerns. On June 11, Chatterjee noted that while concerns over Co-Packaged Optics (CPO) adoption delays and competing Near-Packaged Optics (NPO) technology have pressured shares, these worries may be overblown. Supply chain checks confirm Nvidia's large-scale CPO rollout remains on track. Both companies currently trade at approximately 25 times their estimated 2028 earnings, while Wall Street expects profit growth exceeding 40% over the period. Chatterjee believes potential demand from Nvidia and other customers evaluating CPO and NPO solutions has not been fully priced in, supporting further upside as optical networking component demand expands.
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