$AAOI
High ConvictionInvestment Thesis
AAOI is the largest US-based 1.6T optical transceiver and laser fab by projected capacity. Called at $30, now $150+. Amazon has purchase agreements and warrants with AAOI, making them a direct beneficiary of hyperscaler 1.6T validation. If they execute on becoming the largest 1.6T capacity in the US, Serenity sees $30B+ valuation long term.
Catalysts
- Amazon purchase agreement + warrants — direct hyperscaler anchor customer
- Largest projected 1.6T laser fab capacity in the US
- Goldman Sachs: laser/light sources identified as 'significant EPS upside' segment
- Called at $30 — now $150+ validating the thesis
- Potential to multi-source overflow from NVDA's LITE/COHR capacity crunch
Risks
- Execution risk on scaling 1.6T capacity vs. established LITE/COHR
- Already repriced significantly — entry point more difficult
- Single customer concentration if Amazon relationship weakens
From the Feed (4 signals)
Last year I called out $LITE, $COHR, $AAOI, $AXTI, and Innolight before the supercycle... This year: Found $SOI, which was the SiPH substrate = $AXTI. Then $SIVE, which was the CPO = $LITE. Might have found the CPO equivalent of $AAOI. Curious if anyone can guess?
Genuinely thanks for nice comments. $TSEM hit triple digit return... so that's 16 different names YTD. My YTD hit 1525%+ as a result. Just to recap all the endless abuse along the way: $AXTI - 'Pump and Dump', $AAOI - 'Pumping stock with no fundamentals', $SIVEF - 'Pump and Dump Meme Stock', $LITE - 'Photonics Bubble', $IQE - 'Just pumping low MC stocks', $AEHR - 'Stock with negative revenue growth', $EWY - 'Just from followers', $SOI - 'Pump and dump, no novel idea'. Or how about... the idea around fundamentals was right all along?
It's highly nuanced, and I'll explain why it's not late, but late to some: Photonics is the newest supercycle (maybe H1 into H2 2025 was the start). Then there's many different architectural changes in each supercycle: $LITE, $COHR, Innolight, $AXTI led the first. $AAOI, $JBL types benefit immensely as the transitional bridge (1.6T pluggable). $SIVE, Celestial, Ayar, $POET are future gens (CPO). VisEra, QD Laser, $ALMU are likely future gens (quantum dot). What I'm trying to do is point regular retail investors into the direction of new gold mines for free. Before institutions figure out sooner or later.
Maybe here's what I'd do personally: "High Upside Rockets": 1. $SIVE 2. MSSCorp 3. PCL 4. $AAOI. Compounders: 1. Shunsin 2. Sumitomo 3. Furukawa 4. $COHR 5. $LITE