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Coming off the 2025 rally in which the PHLX Semiconductor Index ($SOX) jumped more than 40%, expectations for the semiconductor industry in 2026 are adjusting. In its new 2026 outlook report titled "Semiconductors & Automotive Technologies," Mizuho declared that while the easy money in the industry has been made, investment opportunities remain for those looking past the commonly recognized industry leaders.
The rationale for such positioning has Mizuho sticking with the likes of Nvidia (NVDA) and Broadcom (AVGO), but it also points to a relatively less crowded name that benefits from the same trend, Lumentum (LITE). With hyperscalers' capex expected to increase 32% year-over-year (YOY) to $540 billion in 2026, the money has begun to trickle down to areas like optical interconnects, photonics, and high-speed data transfer — exactly where Lumentum plays.
