Serenity@aleabitoreddit
The $LITE thesis: The hidden monopoly in the AI.
Lumentum is up 316% YTD, but might be 1000%+ by 2027.
Micron ($300B) or TSM ($1.5T) sit in the center of every TPU/GPU deployed.
But same with $LITE, but it's a $26B MC.
In Every, Single, TPU from Google, $LITE makes unbelievable amounts of profit for their marketcap.
That's because it's the standard for Optical Circuit Switching (OCS) + optical networking.
It's also in
- $NVDA Blackwell
-$AMZN Trainium
- and other hyperscaler ASICs.
Lumentum sits in the holy trinity of every single chip deployment for photonics.
And for every TPU capex spent, $LITE takes 8-12%. For every Nvidia GPU, $LITE takes ~2-3% (split between Innolight and some others, so the math gets a bit complex).
But some napkin math on NVDA GPU deployments alone for BOM:
NVIDIA Blackwell (GB200):
HBM memory: ~50–55% (SK Hynix (Lead), Micron, Samsung)
Logic (GPU Die): ~25-30% ( $TSM 4NP)
CoWoS Packaging: ~13-18% $TSM
Optics/Network: ~3–5% (Innolight, Lumentum, Coherent)
PCB/Power: 5%
For Google TPIU "Ironwood" TPU v7:
HBM Memory: 38-42% Samsung / SK Hynix
Logic Die: TSM ~28-33%
Design/I.O: 8-10% MediaTek
Optical Network: 10-14% ( $LITE (primary), $COHR secondary)
Optical Switch: 2-4% $LITE
$LITE est. total cluster share: ~8–12%
Just an FYI, Google's "Optical" BOM share (8–12%) is an anomaly due to their unique Optical Circuit Switch (OCS) monopoly.
Just for some napkin math:
$40B Google TPU spend by 2027. $LITE captures 10% (30-40% margins), $1.5B+ FCF from Google alone, 17x earnings from just their primary customer. (analysts are probably extremely off with projecting TPU spend scaling).
Not even including their split from $AMZN Trainium, $NVDA Blackwell, $MSFT Maia, and other chip deployments.
$LITE is in the center of every single TPU/GPU future chip deployment for now and takes a cut.
The only downside is they're the clear market leader now, but $AVGO and $COHR are likely set up to compete by 2027-2028. However...
People say "$26B, ATH, why are you buying now".
This is the reason. They're involved in every future single TPU/GPU/ASIC deployed.
$LITE could end up easily over $60B+ if Google TPUs, and other chip spend ramps up and LITE takes a 2-3% (from $NVDA, $AMZN, $MSFT) or 8-12% cut (from $GOOGL) for every single dollar spent.
