Lumentum has significant upside due to strong growth and profitability, and is uniquely positioned to address AI networking bottlenecks.

And Lumenum, ticker symbol LIT, which makes lasers to replace copper wires inside data center racks.

Lummentum doesn't report their data center numbers anymore, but their revenues grew by 83% year-over-year, which probably didn't come from telecom companies.

Lumenum reported a billion dollars in revenue last quarter, which was up 109% year-over-year. Adjusted earnings per share came in at $3.23 23 versus just 88 a year ago, which means their earnings are up 267% from last year.

And their adjusted gross margins hit 50.4%. Lum's main product is an electroabsorption modulated laser or EML. Lumenum makes several different kinds of lasers besides EMLs.

Lum is effectively sold out of their pump lasers for the foreseeable future.

Lumenum spent $451 million on factories and equipment last year against $751 million in cash from operations. That means they spent60 for every dollar they actually made compared to Coherence 14 bucks.

if you pull up Lumen's numbers, they posted a net loss of $84.65 per share last quarter, but that's due to a one-time non-cash charge of $7.8 billion associated with converting debt to equity.

But the business itself generated $279 million in operating income for the quarter. if networking really is the next big bottleneck for AI, Lum is one of the only companies in any position to solve it, especially with Nvidia in their corner, too.

I think Lumenum still has a ton of upside. They grew their revenues by 109% year-over-year at over 50% gross margins. And they only spent 60 cents on every dollar to do it.