According to BNP Paribas Equity Research, recent design wins secured by Lumentum Holdings Inc. (LITE.US), including its 100G and 200G EML chipsets for upcoming mass production of 800G and 1.6T optical modules, could drive the company's share price beyond $1,000. BNP Paribas increased its price target on Lumentum from $625 to $1,040 and reaffirmed its "Outperform" rating.

Analyst Karl Ackerman stated that during Lumentum's investor briefing on March 17, the company convincingly outlined its target to achieve annualized earnings per share exceeding $30 by the end of 2028. This goal is supported by new design wins in its leading portfolio of 800G and 1.6T transceiver EML chipsets, its 400mW ultra-high-power laser for NVIDIA (NVDA.US)'s co-packaged optics, and its self-developed MEMS-based optical circuit switch, which is believed to be primarily used in Alphabet (GOOGL.US)'s TPU 3D Taurus network topology.

Ackerman also noted that Lumentum clearly indicated that with the commencement of operations at its newly acquired Qorvo facility in Greensboro in early 2028, the additional EML capacity would enable annualized sales of approximately $8 billion and an operating margin around 40%, potentially further elevating its targets.

He added that BNP Paribas has raised its performance forecasts for the coming year to reflect the company's newly secured multi-year, multi-billion-dollar optical circuit switch projects. Furthermore, with NVIDIA's recent $2 billion investment to secure multi-year production capacity, increased output of the 400mW ultra-high-power lasers is anticipated as NVIDIA plans to expand co-packaged optics capacity in its upcoming Vera Rubin AI infrastructure.

BNP Paribas raised its 2027 earnings per share estimate for Lumentum from $19.40 to $25.89, while its implied 2028 EPS estimate now stands at $38.95.