Lumentum Holdings Inc. (NASDAQ: LITE) saw its stock price plummet 7.49% during intraday trading on Tuesday, significantly underperforming the broader market.

The sharp decline was primarily driven by renewed investor concerns over delays in the mass production timeline for co-packaged optics (CPO). An independent research report from SemiAnalysis indicated that CPO production could be pushed back to 2028 or even 2029, citing critically low system-level yields of approximately 19%—far below production-ready standards. This assessment has continued to suppress sentiment across the optical communications sector.

Adding to the downward pressure was broad weakness within the Communication Equipment sector, which intensified the negative linkage effect on stocks like Lumentum. Although the company's CEO recently highlighted near-packaged optics (NPO) as an alternative opportunity, the fundamental concerns surrounding CPO delays remain unresolved and continue to weigh on investor confidence.