Prediction: This Data Center Stock Will Be the AI Supercycle's Biggest Winner -- and It's Not a Household Name
The demand for optical networking components is poised to boom, and Lumentum is one of the best ways to capitalize on this lucrative niche.
Overview
Artificial intelligence (AI) data center demand isn't slowing down any time soon, as major hyperscalers and AI companies need to satisfy the huge contractual backlogs they're carrying.
Forbes reports that hyperscalers and AI companies have more than $3 trillion in purchase commitments and uncommenced leases. This explains why investments in AI data centers could surge from $800 billion annually in 2026 to a whopping $1.8 trillion a year in 2050, according to PwC. There are several ways investors can capitalize on this AI infrastructure supercycle.
Details
One can consider buying top chipmakers such as Nvidia and Broadcom, or investing in memory stocks, such as Micron Technology. However, I believe that Lumentum Holdings (NASDAQ: LITE) could be one of the biggest winners of the AI infrastructure boom. Let's look at the reasons why.
Source
Originally published at www.fool.com.