Serenity

Just some near term events: - OCP APAC tomorrow (Ayar, Lightmatter, $AMD, $NVDA) and your CPO players are giving announcements/updates. This should be a catalyst for certain optical players. - Earnings week: with $ASTS, $RKLB reporting today (space), $LITE on Tuesday (photonics), $NBIS in the middle of the week (Neocloud), and more. - Unitree IPO subscriptions opened up today and Listing is expected this month. Should be a potential catalyst for the humanoid + robotics sector if it opens up well eg. $CCXI. Fun week ahead.

All right chat, it’s that time of the month again. What’s your #1 highest conviction stock and why? I actually learn a lot from reading these, so share some cool ideas.

I think it’s a good time to revisit $SIVE ~$427m/yr midpoint capacity revenue modeled projections. Given recent industry earnings: > $AAOI cited +20-40% demand imbalance for transceivers (with lasers as the bottleneck). > $MTSI saying many "Customers are coming to us with urgency due to the general supply shortage of indium phosphide DFB lasers" (in other product lines) > US proposal ban on new Chinese optical transceivers (Innolight/Eoptolink) > AOI no meaningful participation in first-gen CPO deployments due to lasers being allocated toward transceivers. The read through is that it’s possible to apply the same capacity-demand absorpti…

Today I'm writing a weekend guide on how to do DD when shorting $NBIS: First, you look at hyperscaler earnings for AI cloud read through: > $GOOGL: reports record AI cloud demand + backlog + margin increases from earnings > $AMZN: reports record AI Cloud demand + backlog + margin increases from earnings > $META: reports higher than expected prices for available capacity from earnings. Now, time to look at Nebius: -> $NBIS: Growing hundreds of percent to $7-9B ARR by Q4. Growing margins, and guided 4GW+ contracted power. -> Sees Uber/Waymo splitting, putting more focus on Avride -> Sees Clickhouse growing rapidly every quarter. Okay loo…

I've mapped the entire Wall Street bear playbook on AI names: Have your favorite institution/media insert one of these name down below: 1. < ______ [GPUs, Transcivers, MLCC, Memory...] are a commodity set to crash> 2. < ______ [YMTC, CXMT, Dongshan...] from China will flood the market > 3. < ______ [Micron, Nvidia, ...] from unverifiable channel checks is facing issues > 4. < ______ [Kospi, Sivers, ...] is a bubble like the ____ [2007, 2021] crash> 5. <____ [1,2,3, ...] unexpected rate hikes this year> 6. < _____ [Google, Nvidia, Deepseek ...] optimization removes the need of this!> in a new headline, and it's ready to go!

There we go, White House finally invests in more breath in critical minerals/materials. Amazing policy move, as a TLDR: - $WWR receives $25M (graphite) - $SRL (ASX) receives $400M (Scandium) - $FEAM receives $8M (Boron) - $HREE receives $4.8M (magnet rare earths) out of the public companies. With more private investments from $150 million into Niron Magnetics or $85 million into Standard Bauxite. It's literally spare change to the US gov, for ENORMOUS amount of downstream applications. More should be done with funding amounts to accelerate development and derisk supply chains (don't own any of the above, just support the policy move), bu…

Some more TLDR takeaways from $AAOI ER: - They also flagged DSP and TIA bottlenecks, which is a positive industry read through for names like $MXL, then $SMTC and $MTSI. - For revenue growth, they're expecting more than $500 million revenue Q4, which is absurd growth. For reference: Q2: $191.9M Q3: ~$255M-$290M Q4: $500M+ By mid-2027: ~$1.41B quarterly revenue run-rate Always impressed by the revenue ramp from some of these optical players.

I usually make fun of sellside, but Rosenblatt has pretty goated channel checks on optical names, and their reports are one of the few I like talking about. $AAOI, $LITE, $SIVE, and the laser party has started to recover around the est. timing windows. eg. last month: "Multiple short sellers told them they will likely close their positions... late July and early August". They might have missed that they believed $AMD would be $AAOI's first CPO customer... since AAOI said they would be missing from first-gen CPO (maybe future gen?) But lot of their talking points about China CPO laser positioning (eg. 2-3 years behind) got corroborated wor…

Unitree, China's humanoid leader, is set to IPO this month at a $9B valuation! (~$6.2B originally per March filing). Derivative markets are pricing open at an implied $36.04B MC, roughly ~4X listing price. $CCXI / Agility Robotics, the first US publicly listed pure play humanoid leader, is also going public later in Q4, at a ~$2.5B pre-money valuation. It will be interesting to see how markets price in America vs. Chinese Humanoid leaders.

Earlier today, optical interconnect company Lumilens "emerges from stealth" at a $5.5B valuation, after raising $700m. Just as a recap from $POET / $SIVE Linkedin OSINT mapping I shared earlier, Lumilens was supplying a top 3 hyperscaler customer. So we got confirmation of that a month later, along with the material figure that Lumilens has a "multi-billion-dollar customer agreement". And just for reference, $POET has existing contracts with Lumilens ($50m purchase order, up to $500m) + contracts with $SIVE (depending on product lines). I actually took tiny positions in POET again after reading this news, since it finally gives them visib…

$MTSI earnings transcript: "Customers are coming to us with urgency due to the general supply shortage of indium phosphide DFB lasers" Emphasis on "Urgency", CW "DFB lasers", "coming to us". CW DFB names, such as like $SIVE and $LITE should be happy to hear about this laser bottleneck getting validated.

Just some TLDR notes on $AAOI earnings: - Expects full qualification of 1.6T products by their hyperscaler customer within next couple of weeks (helpful revenue ramp #2, timelines) - Continues to believe that AOI will have the largest AI DC transceiver production capacity in the US (reiterating ambitions during a time when their competitors might get banned) - Expects facilities toward InP capacity to come online in early 2027 (timeline FYI in terms of further ramp) - Total capacity is approaching 200,000/u per month, EOY 650,000/u per month of 800g/1.6t. EOY 2027, 930,000/u (this is the ramp i want to see) - "increase our manufactur…

I remain convinced nobody knows how to pronounce or talk about $AAOI in real life. It’s one letter too long to say $TSM or $AMD. And nobody ever says to a friend“Wow, I like applied optoelectronics!”

The unexpected thing of the week... Was $AEVA becoming a CPO/NPO optical source player. For background: $SIVE is viewed as the high confidence CW DFB laser supplier to Aeva (which is known for lidar). Today, Aeva reacted with +18.26% AH on news that they signed a JDA with an optical engine player for deployment at a major hyperscaler in H2 2027, production ramp 2028. "Optical Connectivity will leverage that foundation along with Aeva’s EXISTING high-volume manufacturing and foundry supply chain" for: - ELSFP (similar to O-Net/Enablence + $SIVE), with Sivers as the likely CW laser + potential amplifier supplier - On-chip integrated light …

Funniest callout of the year from $VIAV on CPO timelines: "Well, there's been a lot of industry talk [about delays], like, 'Oh, because the yield is going to be slower.' That's all nonsense. CPO and all that thing is moving forward" They stated that Yes there's always issues, but the process is being improved and things are getting better. To follow up on that, the CEO stated: - Viavi has POs for CPO-testing activity - “We’re already getting [CPO revenue] this quarter, and probably in December it will start accelerating.” On a side note, they also stated, 1.6T is "ramping very quickly", should reach parity with 800g next year, and signa…

$RKLB has been awarded a $397M contract by the US Space Force. To build out Flatellite satellites and launch them on their Medium Lift rocket, Neutron. https://t.co/0jsPPf9ucI

Bessent says: "There may be deal Tuesday or Wednesday to open Strait of Hormuz with freedom of movement" I think markets might like the sound of this. https://t.co/qXc8u2050N

A very material catalyst came about for Western supply chains from $AAOI, $SIVE / Jabil, to $LITE and Coherent: The Trump administration is drafting a ban of new Chinese optical transceivers and DC devices. Which would likely hit China’s Innolight, Eoptolink, and other Chinese optical interconnect supply chains. "The agency would ban all imports of new transceiver models ​and then exempt many ⁠non-Chinese suppliers from the restrictions" We'll likely see a larger bifurcation of supply chains with even greater importance put on Western players.

SK Hynix, $MU , and Samsung have sold out of 2027 capacity for DRAM/HBM. $SNDK, Samsung, Micron current annual NAND capacity has been sold out, with Kioxia and SK Hynix expected to finalize allocations by August 2026. - Customers are being allocated only 60–70% of the volumes they initially requested - industry insiders pointed out that 2027 will enter the most severe moment of memory shortage - Allocation amounts are mostly decided, but final shipment pricing will be determined closer to delivery Source: Digitimes, citing industry sources. Hard to see those memory "oversupply" claims in early-mid 2027 when they're all sold out of capac…

Be Citadel: &gt; calls for unexpected rate hike few days ago, causing market panic &gt; reaches out and buys billions of liquidated hedge fund AI assets &gt; no rate hike &gt; “Bull market drivers are fully intact” https://t.co/gyy4Nk4SHq

The bears have gone back into hibernation

Trump announced that US has cancelled its attack on Iran. And that they’ve agreed to the perimeters of a deal to open the Strait and end the nuclear program. Anyone else feel like they’ve aged a few years in the past 6 months? https://t.co/4PK671c548

$LITE CEO Michael Hurlston at the RAISE Summit warned that the supply gap for InP lasers for AI DCs: Is facing a more severe supply chain crisis than memory. And with Lumentum's 5 InP fabs, shipments would be more than 30%+ below customer demand. This is especially visible with EMLs today but is already expanding to CW, especially as CPO ramps. I've always been a fan of the laser chokepoint + bottleneck from $AAOI, $SIVE, $LITE, and $COHR. And glad this thesis is starting to see validation.

@optionsreaper His ideas would have played out anyway with $SNDK or $BE even without anyone from retail knowing he existed. Retail wouldn't have changed a thing with NAND shortages or hyperscaler demand for Bloom. Downplaying that to just retail copying him is also terrible.

The media framing and X reactions around Leopold are egregious. Framing his successful multi-year thesis from $SNDK to $BE as a "collapse" or "failure". After July's surprising crash, then personally attacking him on top is just pathetic to witness. It's almost like everyone is cheering for the downfall of others. Yes, July's crash exposed problems with SA’s leverage, liquidity management, and hedging. But his current YTD performance remains +80%, ranking among the best performing hedge funds. And he still has public equities after all this (just removed leverage). I think he's doing something unique while being successful at it. And th…

As a earnings recap: $AMZN, $META, $GOOGL, and $MSFT guided a 2026 combined capex forecast to ~$720-$745 Billion. Up from $695-$725B Billion previously. Amazon: $220B Google: $195B-$205B Meta: $130B-$145B Microsoft: $175B We've already seen significant deleveraging and retail/institutional margin liquidations (maybe it continues for more time, who knows). But medium-long term, I'm not quite sure how anyone can be bearish the upstream semis or neoclouds. Given each hyperscaler has flagged either compute shortages, rising cloud demand + pricing power, or increased spending for chips/networking. My "bottleneck" thesis with many of these up…

$RDDT ER in a nutshell: Revenue: $804.9M vs. $730.4M (expected). EPS: $1.25 vs. ~$0.95. Net income: $252.8M vs. $196.5M Q3 guidance: Revenue: $860–870M vs. 829.1M Adjusted EBITDA: $385-395M vs. $369M Blowout financials, market always like to explain the drop 22.6% off some new BS narrative. Last quarter: "AI will disrupt Reddit causing revenue loss!" This quarter: "See, DAU fell .6%!" (proceeds to ignore any revenue/profitability growth)

Just a TLDR of this week: Media: Hyperscalers overbuilt and are selling excess compute. -> $GOOGL, $MSFT, $META, and $AMZN: Demand for compute far exceeds capacity. Capex go brrr. Institutions: Emergency rate hike or 3x rate hikes, it's all over. -> Kevin Warsh: No rate Hike. Retail/Media: AI is crashing because it's a bubble. -> Citadel looking to buy AI leveraged hedge funds positions: 👀 Jim Cramer: Sell all your leveraged DC stocks. -> Koreans: SK Hynix +30%, Samsung +26.81%

Now that I think of it more, $POET optical interposer piece is actually a little more material than I thought with $SIVE. Originally the wording was "readiness" for EOY 2026. But $POET upgraded that wording, by stating "production" with Sivers lasers projected EOY 2026. So a volume orders from across $JBL to $POET, should hit in H1 2027. Which makes a bit of sense, since Sivers did raise an institutional oversubscribed round for future mass production. On a side note, can't believe it's already August and 5 months left until 2027... Which was my inflection window for glass substrates, CPO, 800v, and new architectures to ramp.

For $XFAB ER transcript: Just to recap, my idea on $XFAB foundry growth opportunities stemmed from SiC for 800v and photonixfab/MTP for CPO applicability. - $XFAB: "We are making progress in co-packaged optics". - "The transition to 800v... is expected to support demand for both SiC and GaN... for XFAB" So those analysts/people that were confidently bearposting about $XFAB that they had "0 exposure to 800V, photonics, CPO" just turned out plainly wrong. At the time I shared my idea, industry materials showed ASE and others cited photonixfab + XFAB as an upcoming CPO player in EU. And filings showed they had exposure names like $NVTS / $P…