Lumentum stock dropped 10.5% in morning trading on Thursday, marking the fourth consecutive session of losses as AI optical networking stocks faced broad pressure from concerns about rising borrowing costs affecting infrastructure spending.

The decline follows a downgrade by Zacks Research on Wednesday, which moved Lumentum from "Strong Buy" to "Hold." The stock had previously reached a 52-week high of $1,143 before the recent selloff began erasing gains.

Investor attention has also focused on insider selling activity at the company. The chief financial officer reduced his holdings by approximately 25% in recent months, according to regulatory filings.

The optical networking sector has faced headwinds as market participants weigh the potential impact of higher interest rates on capital expenditures for artificial intelligence infrastructure projects.