Deutsche Bank Singles Out Lumentum and Coherent as Top AI Infrastructure Picks

Deutsche Bank has started covering hardware stocks related to AI infrastructure expansion, naming Lumentum Holdings (LITE) and Coherent (COHR) as its top picks. Analyst Gianmarco Conti highlighted that AI adoption is driving increased demand for computing capacity, particularly in areas beyond graphics processing units (GPUs). This trend could broaden investment opportunities towards central processing units (CPUs), optical components, and other infrastructure.

The bank pointed to Lumentum's laser technologies used in optical connections for AI systems. Conti noted that both companies face supply constraints and are raising prices, with Nvidia investing $2 billion in each company.

Deutsche Bank also gave Buy ratings to Arista Networks (ANET) and Cisco Systems (CSCO), citing Arista's exposure to enterprise and sovereign AI deployments and Cisco's combination of silicon, optics, and networking systems. The bank noted that Cisco has secured $9.3 billion in hyperscaler AI orders.