We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
LITE vs. AMKR: Which AI Connectivity Stock Has Better Potential?
Read MoreHide Full Article
Key Takeaways
LITE posted record Q3 FY26 revenues, driven by AI transceivers, lasers and cloud networking.
Lumentum secured a multibillion-dollar OCS deal and expanded AI manufacturing capacity.
AMKR sees AI packaging growth but faces higher capex, supply-chain and geopolitical risks.
Lumentum Holdings (LITE - Free Report) and Amkor Technology (AMKR - Free Report) are emerging beneficiaries of the rapid expansion of artificial intelligence infrastructure. Lumentum develops advanced optical and photonic components used in high-speed data center connectivity, while Amkor is a leading outsourced semiconductor packaging and testing company supporting next-generation AI chips.
The two companies share a strong connection to the rapidly expanding AI connectivity ecosystem. As hyperscalers invest heavily in AI servers, networking and chip performance, demand for optical interconnects and advanced semiconductor packaging continues to rise. Recent industry momentum around photonics and advanced packaging makes the comparison especially relevant now.
Since both are positioned to benefit from rising AI data center spending, both stocks offer different ways to benefit from this trend. But which stock looks more promising right now — LITE or AMKR? Let us delve deeper.
The Case for LITE Stock
Lumentum is emerging as one of the strongest beneficiaries of the accelerating AI infrastructure and optical connectivity buildout. The company’s optical and photonic technologies are critical for AI/ML workloads, cloud data centers and high-speed networking applications, positioning Lumentum at the center of next-generation AI connectivity demand.
The company delivered exceptionally strong third-quarter fiscal 2026 results, with revenues surging 90% year over year to a record $808.4 million, driven primarily by AI-related transceivers, laser chips and cloud networking demand. Its robust growth in 100G and 200G EML laser shipments, narrow-linewidth lasers, pump lasers, optical circuit switches (OCS) and 1.6T transceivers — all of which are directly tied to hyperscaler AI data center expansion.
Lumentum’s strengths lie in its broad AI networking portfolio spanning scale-up and scale-across architectures. The company is benefiting from rising demand for co-packaged optics, optical interconnects and high-bandwidth synchronization technologies required for massive AI clusters. It highlighted that several important products have been virtually sold out, driven by strong customer demand.
Strategically, Lumentum strengthened its long-term growth prospects through the acquisition of a fifth indium phosphide fabrication facility in Greensboro, North Carolina, which expands manufacturing capacity for future AI-driven demand. The company also secured a multiyear, multibillion-dollar OCS purchase agreement, reinforcing revenue visibility. With fourth-quarter fiscal 2026 revenue guidance of $960 million-$1.01 billion and non-GAAP EPS guidance of $2.85-$3.05, Lumentum appears well-positioned for sustained earnings expansion as AI infrastructure spending accelerates globally.
The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.21 per share, up 6.8% over the past 30 days and reflecting impressive growth of 298.54% year over year.
Image Source: Zacks Investment Research
The Case for AMKR Stock
Amkor is strengthening its position as a key AI connectivity and semiconductor infrastructure player through advanced packaging and test solutions used in AI data centers, smartphones, automotive electronics and high-performance computing applications. The company continues to benefit from rising demand for advanced packaging technologies such as HDFO, flip-chip and wafer-level processing, which are critical for next-generation AI and data-center chips. Management highlighted growing opportunities from multiple AI and compute customers, including the ramp of a new HDFO data-center CPU program in 2026.
Amkor delivered record first-quarter 2026 revenues of $1.68 billion, up 27% year over year. Gross margin improved to 14.2%, supported by a favorable product mix, higher utilization and cost-management initiatives. AI data-center applications drove record computing revenues, while automotive demand benefited from ADAS and infotainment growth.
The company’s long-term strengths include its broad geographic manufacturing footprint, strong relationships with leading chipmakers and expanding advanced-packaging capabilities. Amkor is investing heavily in its Arizona facility and Korea expansion to support future AI-driven demand and diversify supply chains. Management expects these investments to position the company for a multiyear growth cycle in advanced semiconductor packaging.
However, risks remain. Amkor faces exposure to export controls, geopolitical tensions, material cost inflation, supply-chain constraints in advanced silicon and substrates, and softness in PCs and laptops. The company is also entering an elevated capital expenditure cycle of $2.5-$3 billion through 2027, which could temporarily pressure margins as new facilities ramp production.
The Zacks Consensus Estimate for AMKR’s 2026 earnings is pegged at $2.08 per share, up by 28.4% over the past 30 days. The company reported earnings of $1.50 per share in the year-ago quarter, suggesting 38.67% growth.
Image Source: Zacks Investment Research
Stock Performance: LITE vs. AMKR
Year to date, LITE stock has delivered a stellar 135.5% return, nearly doubling the 73.5% gain posted by AMKR. Lumentum’s outperformance is backed by solid AI-driven revenue growth, expanding margins and strengthening demand across its optical networking portfolio. These fundamental tailwinds are backing Lumentum's impressive market performance.
YTD Price Performance Chart
Image Source: Zacks Investment Research
Valuation-wise, Lumentum is currently trading at a premium, as suggested by the Value Score of F. In terms of the forward 12-month Price/Sales ratio, LITE shares are trading at 12.85X, higher than AMKR’s 2.18X. LITE’s premium valuation is supported by its growing exposure to high-growth markets such as co-packaged optics, optical circuit switches and hyperscale AI data-center networking.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion
Lumentum stands out as the stronger AI connectivity investment, supported by its rapid AI-driven revenue growth, expanding optical networking demand, strong earnings momentum and growing exposure to hyperscale AI infrastructure. In contrast, Amkor offers solid long-term potential through advanced semiconductor packaging but faces higher cyclical, geopolitical and capital expenditure risks.
Given these factors, LITE seems a better pick for investors than AMKR right now. While Lumentum sports a Zacks Rank #1 (Strong Buy) at present, Amkor has a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
LITE vs. AMKR: Which AI Connectivity Stock Has Better Potential?
Key Takeaways
Lumentum Holdings (LITE - Free Report) and Amkor Technology (AMKR - Free Report) are emerging beneficiaries of the rapid expansion of artificial intelligence infrastructure. Lumentum develops advanced optical and photonic components used in high-speed data center connectivity, while Amkor is a leading outsourced semiconductor packaging and testing company supporting next-generation AI chips.
The two companies share a strong connection to the rapidly expanding AI connectivity ecosystem. As hyperscalers invest heavily in AI servers, networking and chip performance, demand for optical interconnects and advanced semiconductor packaging continues to rise. Recent industry momentum around photonics and advanced packaging makes the comparison especially relevant now.
Since both are positioned to benefit from rising AI data center spending, both stocks offer different ways to benefit from this trend. But which stock looks more promising right now — LITE or AMKR? Let us delve deeper.
The Case for LITE Stock
Lumentum is emerging as one of the strongest beneficiaries of the accelerating AI infrastructure and optical connectivity buildout. The company’s optical and photonic technologies are critical for AI/ML workloads, cloud data centers and high-speed networking applications, positioning Lumentum at the center of next-generation AI connectivity demand.
The company delivered exceptionally strong third-quarter fiscal 2026 results, with revenues surging 90% year over year to a record $808.4 million, driven primarily by AI-related transceivers, laser chips and cloud networking demand. Its robust growth in 100G and 200G EML laser shipments, narrow-linewidth lasers, pump lasers, optical circuit switches (OCS) and 1.6T transceivers — all of which are directly tied to hyperscaler AI data center expansion.
Lumentum’s strengths lie in its broad AI networking portfolio spanning scale-up and scale-across architectures. The company is benefiting from rising demand for co-packaged optics, optical interconnects and high-bandwidth synchronization technologies required for massive AI clusters. It highlighted that several important products have been virtually sold out, driven by strong customer demand.
Strategically, Lumentum strengthened its long-term growth prospects through the acquisition of a fifth indium phosphide fabrication facility in Greensboro, North Carolina, which expands manufacturing capacity for future AI-driven demand. The company also secured a multiyear, multibillion-dollar OCS purchase agreement, reinforcing revenue visibility. With fourth-quarter fiscal 2026 revenue guidance of $960 million-$1.01 billion and non-GAAP EPS guidance of $2.85-$3.05, Lumentum appears well-positioned for sustained earnings expansion as AI infrastructure spending accelerates globally.
The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.21 per share, up 6.8% over the past 30 days and reflecting impressive growth of 298.54% year over year.
Image Source: Zacks Investment Research
The Case for AMKR Stock
Amkor is strengthening its position as a key AI connectivity and semiconductor infrastructure player through advanced packaging and test solutions used in AI data centers, smartphones, automotive electronics and high-performance computing applications. The company continues to benefit from rising demand for advanced packaging technologies such as HDFO, flip-chip and wafer-level processing, which are critical for next-generation AI and data-center chips. Management highlighted growing opportunities from multiple AI and compute customers, including the ramp of a new HDFO data-center CPU program in 2026.
Amkor delivered record first-quarter 2026 revenues of $1.68 billion, up 27% year over year. Gross margin improved to 14.2%, supported by a favorable product mix, higher utilization and cost-management initiatives. AI data-center applications drove record computing revenues, while automotive demand benefited from ADAS and infotainment growth.
The company’s long-term strengths include its broad geographic manufacturing footprint, strong relationships with leading chipmakers and expanding advanced-packaging capabilities. Amkor is investing heavily in its Arizona facility and Korea expansion to support future AI-driven demand and diversify supply chains. Management expects these investments to position the company for a multiyear growth cycle in advanced semiconductor packaging.
However, risks remain. Amkor faces exposure to export controls, geopolitical tensions, material cost inflation, supply-chain constraints in advanced silicon and substrates, and softness in PCs and laptops. The company is also entering an elevated capital expenditure cycle of $2.5-$3 billion through 2027, which could temporarily pressure margins as new facilities ramp production.
The Zacks Consensus Estimate for AMKR’s 2026 earnings is pegged at $2.08 per share, up by 28.4% over the past 30 days. The company reported earnings of $1.50 per share in the year-ago quarter, suggesting 38.67% growth.
Image Source: Zacks Investment Research
Stock Performance: LITE vs. AMKR
Year to date, LITE stock has delivered a stellar 135.5% return, nearly doubling the 73.5% gain posted by AMKR. Lumentum’s outperformance is backed by solid AI-driven revenue growth, expanding margins and strengthening demand across its optical networking portfolio. These fundamental tailwinds are backing Lumentum's impressive market performance.
YTD Price Performance Chart
Image Source: Zacks Investment Research
Valuation-wise, Lumentum is currently trading at a premium, as suggested by the Value Score of F. In terms of the forward 12-month Price/Sales ratio, LITE shares are trading at 12.85X, higher than AMKR’s 2.18X. LITE’s premium valuation is supported by its growing exposure to high-growth markets such as co-packaged optics, optical circuit switches and hyperscale AI data-center networking.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion
Lumentum stands out as the stronger AI connectivity investment, supported by its rapid AI-driven revenue growth, expanding optical networking demand, strong earnings momentum and growing exposure to hyperscale AI infrastructure. In contrast, Amkor offers solid long-term potential through advanced semiconductor packaging but faces higher cyclical, geopolitical and capital expenditure risks.
Given these factors, LITE seems a better pick for investors than AMKR right now. While Lumentum sports a Zacks Rank #1 (Strong Buy) at present, Amkor has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank stocks here.