We recently published a list of 11 AI News Updates on Wall Street’s Radar. In this article, we are going to take a look at where Lumentum Holdings Inc. (NASDAQ:LITE) stands against other AI news updates on Wall Street’s radar.
China has sensed a window of opportunity in its race to usurp US dominance in AI innovation. As Washington remains focused on building regulatory walls that restrict access to AI, Beijing has resorted to fostering open-sourcing artificial intelligence models to boost AI innovation and adoption. That was clear when DeepSeek unveiled cost-effective AI models that challenged American tech dominance on large language models and data centers.
While the initial focus was on how DeepSeek came up with powerful AI models that rivaled US models, the focus has since changed to how the Chinese startup catalyzed the adoption of open-source AI models. The decision to open source AI source code comes as Chinese companies look to capitalize on growing opportunities in the artificial intelligence software market, growing at a compound annual growth rate of 35.52% and expected to be worth $223.35 billion by 2028, according to Research and Markets.
“DeepSeek’s success proves that open-source strategies can lead to faster innovation and broad adoption,” said Wei Sun, principal analyst of artificial intelligence at Counterpoint Research.
Understanding that it will require time for China to reach the level of the US in advanced AI computing, Chinese firms have concentrated on creating more efficient and cost-effective AI solutions. They are also striving to establish leading roles in open-source AI, cloud services, and worldwide data networks.
These approaches allow China to provide more affordable and unrestricted AI access to nations discontented with US policies, integrating it into developing markets in ways that will be challenging to disrupt. This is not merely a contest in AI; it is a struggle for dominance over the global digital infrastructure both now and in the future.
Since DeepSeek sent shockwaves, several Chinese companies have released open-source models that are free for individual users. The move to open-source AI models underscores a broader shift in China that no longer focuses on proprietary licensing. Instead, Chinese companies freely offer the underlying source code for modification and redistribution.
While US tech giants have always insisted on open-sourcing their models or source code, that has not always been the case in entirety, for starters, most US companies claim to use open-source code while still restricting their use and modifications. Other US companies generate revenue by charging people to access their models even on claiming they are open source.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds in Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a technician calibrating a laser beam.
Lumentum Holdings Inc. (NASDAQ:LITE)
Number of Hedge Fund Holders: 57
Lumentum Holdings Inc. (NASDAQ:LITE) is a leading developer and provider of optical and photonic products for the cloud and networking markets. On March 31, the company affirmed the significant milestone it has achieved in advancing next-generation, high bandwidth, and lower power per bit optics for artificial intelligence (AI)/machine learning (ML) and cloud infrastructure.
In collaboration with Marvell Technology, a leader in data infrastructure, Lumentum Holdings Inc. (NASDAQ:LITE) is poised to showcase the industry’s first 400G/per lane PAM4 technology operating at 225 Gbaud. The live demonstration will feature a cutting-edge 450G PAM4 distributed feedback (DFB) laser integrated with a Mach-Zehnder (MZI) modulator. The exhibition highlights the preparedness for next-generation 3.2T optical transceivers, which are crucial for the swiftly growing AI/ML tasks and large-scale cloud networking frameworks.
“Lumentum’s collaboration with Marvell marks our joint commitment to pushing the boundaries of 400G per lane technology innovation,” said Matt Sysak, Lumentum CTO of Cloud and Networking. “Together, we are enabling 400G per lane solutions that go beyond what silicon photonics can offer, unlocking higher performance and scalability foundational for next-generation AI/ML and cloud infrastructure.”
Overall, LITE ranks 3rd on our list of AI news updates on Wall Street’s radar. While we acknowledge the potential of LITE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LITE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
