Lumentum Shares Drop Amid Concerns Over Sustainability of AI Growth
Shares of Lumentum (NASDAQ: LITE) fell nearly 10% on Monday, reversing from recent gains driven by optimism around the artificial intelligence (AI) boom. The decline followed comments from Broadcom CEO Hock Tan at an industry conference in Singapore over the weekend, where he warned that many investors are treating AI as a speculative "casino" and questioned whether current spending levels will lead to sustainable business models. Lumentum had surged last week after its CEO stated the company was nearly sold out through 2029 due to strong demand for optical lasers used in high-speed data centers. However, Tan's remarks raised doubts about long-term AI adoption by enterprises and whether experimental use of AI tokens will translate into economic value. Despite these concerns, Lumentum remains well-positioned if the broader AI infrastructure build-out continues as expected.