Lumentum Holdings Inc. (LITE)

Lumentum makes optical components and lasers — the same data-centre interconnect market as Coherent.

The key products are lasers and modulators for optical data transmission plus components for telecom networks. Growth is set by the build-out of AI data centres: the more accelerators are linked into one cluster, the more optics each requires.

The company historically depended on consumer electronics — lasers for face recognition in smartphones — and that market proved unstable, being determined entirely by one handset maker's decisions. Shifting toward data centres made revenue less hostage to someone else's cycle.

Risks: customer concentration, price competition from Chinese module makers, and the ability to scale output faster than demand — in optics a missed generation means the customer designs someone else in for the whole platform. The company carries debt and pays no dividend.