Munro Global Growth Small & Mid Cap Fund on Lumentum Holdings Inc.
Thesis
Lumentum supplies optical components and lasers used to connect equipment within and between AI data centres. Demand for this optical connectivity continues to run well ahead of supply, making it a direct beneficiary of AI infrastructure expansion. Its shares held up better than most of the AI supply chain during the quarter and it remained the fund’s largest disclosed holding. Munro’s broader view is that accelerating agentic AI token usage will sustain demand for compute and connectivity.
“demand for optical connectivity inside and between AI data centres continued to run well ahead of supply.”
Key risks
- An abrupt reversal of AI infrastructure spending or weaker durability of capital expenditure
- Sector-wide forced selling from concentrated AI portfolios
- Higher interest rates pressuring growth-stock valuations
- Supply limitations constraining the ability to meet strong optical component demand