On August 24, Lumentum declined 3.05% overnight, trading at $840.21/share, with turnover of $11.74 million. The optical communications sector continues to face systematic selling pressure as surging long-term U.S. Treasury yields and concerns over an AI infrastructure spending bubble weigh on high-capex hardware names.

The 30-year U.S. Treasury yield has climbed to near two-decade highs, compressing valuations across AI hardware stocks that are particularly sensitive to discount rate increases. Although Lumentum delivered a significant earnings beat on August 11 — with fiscal Q4 revenue of $1.03 billion representing 109% year-over-year growth and Q1 guidance roughly 8% above consensus — short-term sector rotation pressure remains unresolved. Multiple investment banks have raised their price targets, including JPMorgan to $1,280 and BNP Paribas to $1,380, yet the broader sector remains weak. Within the Communication Equipment sector, peer Applied Optoelectronics fell over 12%, while Cisco edged up 0.14% and Nokia slipped 0.59%.

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