I’m not sure why many folks are super bearish on my high conviction $AAOI long…
Ever since 170. (Yes I do think every bear is wrong, we’ll see who’s right).
They have scarce laser capacity that $AMD and other hyperscalers are looking for.
While the entire industry is bottlenecked by $NVDA .
Along with a US transceiver supply chain for mass production of 800g/1.6T (management - largest in America).
While demand far exceeds supply and while assembly gets outsourced to Asia.
Then they’re quoting 5.6B ARR, off a $13.5B MC…
While a lot of major inflection volume hits even later in 2028.
As for fluctuations, there might be active $600M ATMs that get tapped into at random times.
And random bear posts + macro from time to time that cause more volatility (eg. Analyst notes saying bear on $LITE due to false CPO delay rumors, then that brings down others in the sector).
Also we’re a year out so timelines are still a little early.
I haven’t seen such fast revenue ramp since $NBIS .
Mizuho Research: No delays on CPO or 800v dc. Revised up optical engine projections from
demand ramp. - Next phase in CPO for long term, believes InP DFB lasers remains the focus (hello $SIVE). VSCEL and microLED remain “unproven” in short distance in rack + chip to chip for 1.6T+ - HVDC deployment on track, 800VDC incremental volume 2027, with higher penetration in 2028. What a stupid CPO related selloff recently.
Just some random thoughts, I do think AI is the most disruptive technology in human history. To the level of agricultural or industrial revolution. Since Anthropic, OpenAi, XAI, and others are racing to build superintelligence. The amount of economic impact can’t be measured if AI helps find cures for cancer or accelerates discovery for Quantum Computing. Or if AI end up displacing the workforce, which increases profitability for companies. The US Gov has every incentive to keep the buildout going too, as the implications from Warfare, Cybersecurity, is also immeasurable if China takes the lead. So there’s likely to be incentives and subsidies to win, even if there’s not enough profit derived LLM training/inference. As for sustainability, when you look upstream,
is able to fund it majorly with their own cashflow, same with
,
. More lukewarm on
. Very iffy about
. But I do see some bubbles forming around debt interest like
. Maybe circular valuations that’s happening with OpenAI backlog agreements or
/
agreements with Neoclouds to buy their GPUs. But as seen with
and having OpenAI be a major part of the backlog, it did correct off the information, so “bubbles” like that do pop despite the overall markets increasing. Definitely don’t see a bubble in upstream semiconductors from
to Sk Hynix though since the amount of profit they get from the buildout would likely be insane to make up for capex decreasing. OpenAI was actually my biggest fear from contagion, eg.
,
and others, but they just raised a lot. So think it will be fine for another 1 1/2 years of capex, especially if they IPO this year. I also don’t think we’ll get massive Fed tightening despite “predictions” since this will trigger a contagion since many of these players rely heavily on debt. And although the Fed is independent, don’t think Trump would have supported someone who is against his administration goals. As for semiconductor valuations going up every day like
or
, there’s probably going to be some corrections here and there. Everything going up together is kinda unhealthy. Can’t time the capex peak but just from
and other projections, it just keeps accelerating exponentially into 2028. Especially as everyone is starting to sign multi year agreements as well. OpenAI contagion / hyperscaler capex decreasing / fed tightening was what I’m looking out for, and no blaring signs of any of those yet. So I think the music will keep playing for this year at the bare minimum.
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I did say
looked like the next
. Now we’re at a $1.23T MC. Started talking more about Samsung Electronics/Sk Hynix back in 2025. Put more concentration into the memory theme like
and others, Jan of this year. And I’m glad my prediction with Micron + memory is playing out well! Hope people had fun with
longs too, those are up a lot.