Paradi Lab

Helping you understand why names like $Micron Tech(MU.US), $SIVE, and $Applied Optoelectronics(AAOI.US) are down sharply today:

Paradis Macro Report [June 9]:

-> Iran war, yields/rates, and upcoming macro catalysts.

Iran shot down U.S. Apache helicopter today while patrolling over the Strait of Hormuz.

A confirmed US strike on Iran would:

Spike oil = Hit risk appetite = Worsen equity weakness.

Today, we already saw some violent factor rotation:

Momentum/growth -> Value/defensive

Highlighted by:

- $QQQ: -4.2% intraday

- $SPY: -2.7% intraday

- $DJI: flat

So, a very fearful / risk-off market right now, as seen by high growth names like $IREN(IREN.US), $AXT(AXTI.US) and $Lumentum(LITE.US) being down >10% today.

Yields have also jumped after the June 5 payrolls beat (US 10Y: 4.54%). Meaning that Fed futures are now pricing in a rate hike by end of yr.

Basically:

Higher real yields = valuation compression for long-duration growth/AI names.

(Long-duration because the value in AI equities sit in cash-flows years out)

Ultimately, all this favours value/financials over AI growth names, which are all unwinding simultaneously right now.

But directionally, AI supercycle names will all continue higher in the long-run, driven by huge hyperscaler capex.

In terms of upcoming macro catalysts:

1. US May CPI [Jun 10]:

A hot print (>4.2% headline) hardens the "Fed can't cut / may hike" narrative.

= yields up, $ up, more pressure on AI/growth multiples.

A soft core surprise would be the relief valve for chips.

= relief rally in AI names.

2. $Oracle(ORCL.US) Earnings [Jun 10]:

Strong RPO/capex execution = bullish for the entire AI supply chain (HBM, optical, packaging, networking).

3. FOMC [Jun 16-17]:

The statement language (does it drop the easing bias / call labour "solid" vs "moderating") and the dots will reset the Y/E hike vs cut debate.

A hawkish hold / hike-signaling dots = pressure on AI supercycle names.

Any dovish surprise = relief for AI supercycle names.

---

For inexperienced investors, I have advised countless times to avoid risky instruments such as options/leverage. Right now, with the current macro backdrop, stick to normal shares.

Personally, I have slowed down most dip-buying to let this macro uncertainty wash through.

Fun times with $SIVE:

New $8.2M order from All Space for Sivers' BFICs.

Pretty huge order for 2027, since total Q1 2026 rev was just $6.7M.

And embeds $SIVE in the US defence ecosystem via $York Space(YSS.US) pending acquisition of All Space.

Which will lead to more follow-on orders, likely of bigger size & scope.

However:

Personally, I don't see SATCOM as a long term growth driver for Sivers since SpaceX / $Rocket Lab(RKLB.US) eat up TAM through vertical integration.

With Sivers collecting potential orders in the long tail of other Space related companies.

Just shows that CPO ramp is their highest optionality growth lever for 2027+ imo.

But good to see a potential financial inflection point coming next year, just via defence/Satcom POs alone.

Nice cataylst regardless.

Stock Ratings [June 7th]:

On current AI sector crash. Explanations below.

Strong Buy:

$Alphabet(GOOGL.US)

$Micron Tech(MU.US)

$Sandisk(SNDK.US)

SK Hynix

Buy:

$Amazon(AMZN.US)

$Aehr Test(AEHR.US)

$Applied Optoelectronics(AAOI.US)

$Ciena(CIEN.US)

$Coherent Corp.(COHR.US)

$Credo Tech(CRDO.US)

$Dell Tech(DELL.US)

$Fabrinet(FN.US)

$Formfactor(FORM.US)

$Corning(GLW.US)

$Jabil(JBL.US)

$Lumentum(LITE.US)

$MongoDB(MDB.US)

$Marvell Tech(MRVL.US)

$Microsoft(MSFT.US)

$Nebius(NBIS.US)

$ServiceNow(NOW.US)

$NVIDIA(NVDA.US)

$Reddit(RDDT.US)

$Rocket Lab(RKLB.US)

$SIVE

Hold:

$Arm(ARM.US)

$ASML(ASML.US)

$Broadcom(AVGO.US)

$AXT(AXTI.US)

$Bloom Energy(BE.US)

$Meta Platforms(META.US)

$Macom Tech(MTSI.US)

$Palantir Tech(PLTR.US)

$SoFi Tech(SOFI.US)

Avoid:

$Cerebras(CBRS.US)

$Coreweave(CRWV.US)

$ETH

$Hims & Hers Health(HIMS.US)

$IBIT / $Grayscale Bitcoin Mini Trust ETF(BTC.US)

$IREN(IREN.US)

$Mercadolibre(MELI.US)

$Snap(SNAP.US)

$Tesla(TSLA.US)

$SpaceX(SPCX.US) (SpaceX) IPO

---

Thoughts:

Strong Buy:

GOOGL - $85B raise is dilutive but they actually have ROI on their capex. Tbh, they'll probably always be a Strong Buy for me. Just the cleanest AI ROI among all the megacaps.

MU / SNDK / SK Hynix - If you're not bullish on memory, then idk for you.

Buy:

AMZN - Mainly for AWS reacceleration + Trainium. But some tension comparing AWS growth (+17%) vs Azure (+31%). Feel like custom silicon + distribution combo is durable even if growth rate lags a bit.

AEHR - H2 ramp in WLBI/PLBI systems coming, anchored by "significant" follow-on Sonoma order from lead hyperscale customer. Just need to wait a bit esp. for rev to inflect. But AI ASIC burb in is mandatory as device power goes up.

AAOI - Q3 capacity ramp (via facility expansion in Texas) toward 650k+ 800G/1.6T units/mth. Capacity coming online is the catalyst imo along w/ already known laser bottleneck + Made in US premiums.

CIEN - Just a high quality biz that got pounded last week (-22%). Beat + raise earnings, but stock dropping this much is an overreaction. CEO even said demand is "structural, multi year and AI-driven" shown by AI-driven DCI being their fastest growing part of the order book as new long-haul routes get built for latency and bandwidth.

COHR - upcoming CPO ramp (Nvidia spectrum-x) will speed things up, these prices will look cheap when we look back imo.

CRDO - Personally bought a ton last week post-earnings drop. Like Ciena, v. high quality compounding hold through the whole AI supercycle. Crazy high margins. Obviously compete w/ Marvell/Broadcom on SerDes, but also need to factor in the 1.6T switch replacement cycle into late 2026.

DELL - Trump effect. I've learnt my lesson and will listen to him next time.

FN - v. low drama way to ride transceiver demand + iPronics sipho line for cpo. New datacom wins also extending into next FY, although some Nvidia conc. risks. Put them in Buy just to be generous as was unsure tbh.

FORM - Important for HBM, adv packaging and CPO for higher yields. Foundry test intensity only set to increase w/ production.

GLW - Lead glass core substrates which are an advanced packaging bottleneck. LTP w/ Nvidia to expand US optical manufacturing for AI infra too.

JBL - Stock has done nothing for a month, but earnings coming up could be a nice catalyst for a push higher from their DC infra segment growing + outpacing drag from legacy mobility/ev exposure / margin mix.

LITE - CPO ramp + Nvidia qualification like Coherent.

MDB - AI is not replacing them. Imo they win vs. bolt on vector stores since their architecture is so simple.

MRVL - going to $1T according to Jensen. Underlying business is solid though esp. w/ Celestial acquisition for photonics. SPY inclusion last week too is a big positive.

MSFT - Current valuations are a joke tbh, markets probs punishing some margin compression. Rev +18%, Azure +40%, AI run rate +123%. So, v. clear enterprise monetisation path. Will be buying next week in retirement account.

NBIS - Best neocloud by far. They're a $100B biz vs. ~$57B currently. Jensen: "Nebius will take care of you."

NOW - AI is not replacing them. No enterprise CEO/CTO is dumb enough to offboard them at this point.

NVDA - Same as Microsoft. Been buying this whole time, but am now even more confused at current cheap valuations.

RDDT - AI is not replacing them. Cash printer. ARPUs improving also in legacy segments like international.

RKLB - #2 in commercial launch after SpaceX + their IPO should re-rate the entire space comp set where RKLB is the main liquid proxy. Unbelievable earnings also, just executing so well rn.

SIVE - everyone on X knows at this point?

Hold:

ARM - current valuation prices in flawless execution imo. But their IP is growing in DC CPUs e.g. Nvidia grace, AWS Graviton etc.

ASML - Elon said yesterday: "ASML should be treasured and supported. It is arguably the greatest company in Europe." - I agree. Also Terafab fireside chat next week High-NA EUV is the next leg, locking in the roadmap through the decade. Could also be a "Buy" for more risk averse people.

AVGO - CEO didn't raise >$100B FY27 target + flagged that Google will multi-source. Current AI mix is also diluting margins slightly. Just needed a pullback before the thesis starts working again.

AXTI - InP substrate bottleneck, crucial for AI buildout rn. Could also buy rn, just a slow dca since they've run up a ton already + raise completed ($632M) to 2x InP capacity.

BE - SOFC winner imo (Ceres 2nd). Don't think it's a buy just yet due to some valuation vs. profitability gaps.

META - hold based on capital allocation mainly. Market seems wary of the ROI on their AI capex hence the continuous dips. Also potential raise to fund capex like Google too - once that digests, I'll personally look to buy.

MTSI - Big fan of their investment into $IQE since it de-risks operations a lot, but just think COHR/LITE are better options for 800G/1.6T transition.

PLTR - Relatively poor Risk:Reward at current multiples.

SOFI - rate sensitivity. Loan book + credit performance carry macro risk which caps conviction rn. Some positives though w/ young + growing member base. Would need to look at credit trends + Fed path in June FOMC to re-assess.

Avoid:

CBRS - avoid at current prices. Would want it to come down closer to ~$40B mc before I look to dca. Would love to hold since they own genuinely unique tech.

CRWV / IREN - Financing for both is a mess...debt/dilution. Nebius are just a better multi yr neocloud.

HIMS - Forced out of higher margin GLP1s into lower margin braded GLPs from Novo/Lilly. Feel like their moat was to do w/ regulatory arbitrage on compounding. With that gone, it's a customer acquisition + churn biz buying branded drugs at lower margin.

IBIT / BTC - Macro setup is hostile. Higher rates for longer (10Y ~4.54%, 30Y >5%) raise opportunity cost. Pure liquidity/risk appetite instrument + both are tight rn.

ETH - same as bitcoin.

MELI - personally a little confused - either a hold/avoid. Seeing some margin compression via their credit book growing faster than revenues. Talks of margin recovery next year, at which point the stock could re-rate.

SNAP - Absolute worst social media app + CEO is a weirdo. Platform keeps losing share to Meta/Tiktok.

TSLA - Huge competition from other EV makers shown by production > deliveries volumes. Humanoids will be their next key growth driver, just a little while away.

SPCX (SpaceX) IPO: I never personally participate in IPOs + SpaceX specifically is way too overvalued for me. Will be going long eventually though. Rough ballpark would be ~$1.5T if it gets there post IPO.

---

Just for very high level notes at current stock prices (NFA).

I'm personally staying long despite the current macro backdrop, mainly in AI supercycle names e.g. memory, semis etc.

But then you also have great companies at depressed prices, mainly in SaaS which I'm DCA'ing currently.

I don't hold positions in all of these names. This is just a subset that overlaps my "Close Tracking" list + X's favourite names.

I'm buying today's dips in all my AI names like $Sandisk(SNDK.US), $Applied Optoelectronics(AAOI.US), $Nebius(NBIS.US) etc.

Nothing's changed with AI related stocks.

But for context on why today's a deep red day:

-> Nonfarm payrolls increased by 172k jobs in May Vs. 85k consensus.

-> So overall less layoffs in the economy = tightening labour market.

-> Tight labor market = zero urgency for the Fed to cut rates.

-> plus energy inflation from Hormuz standoff = Fed can't cut anyway.

Then ofc yields spiked on the jobs data release.

And when yields rise, the longest duration assets in the market reprice first

That's AI:

w/ AI names like $Micron Tech(MU.US), $NVIDIA(NVDA.US), $Lumentum(LITE.US) etc:

Pretty much all of the value sits in future earnings / cash flows.

so...higher discount rate, lower present value = downward re-rating.

Just keep in mind that nothing fundamental w/ the AI trade has changed at all.

Like, $Broadcom(AVGO.US) even confirmed a few days ago that supply is secured through 2027 to support next yrs rev forecasts.

And we all know hyperscalers like $Alphabet(GOOGL.US) are funding AI capex aggressively rn. Which is the whole crux of the supercycle.

You need to be more bullish on $Sandisk(SNDK.US), $Micron Tech(MU.US), SK hynix & Samsung...

Semiconductor Market Forecast (WSTS):

-> 2026: $1.5 trillion (+90% YoY) - due to memory demand

-> 2027: $1.9 trillion (+27% YoY) - mainly memory-driven again

-> Memory forecast:

2026: $800B (+250% YoY)

2027: $1.1 trillion (+32% YoY)

I don't see a viable situation rn where memory slows down.

Huge demand + supply shortage = pricing power = rocket fuel.

-> Also in 2027:

Optoelectronics: accelerating 5% growth to $46.4B (vs. 2.7% fcst in 2026).

Includes some of your favourite photonics names like $Lumentum(LITE.US) / $Coherent Corp.(COHR.US) / $Applied Optoelectronics(AAOI.US) / $SIVE at chip level.

And $IQE / $AXT(AXTI.US) at substrate level.

Always good to see other data sources + forecasts to backup overall bullishness.

Everything's gone quiet around $AXT(AXTI.US) suddenly?

They're still a vital InP substrate bottleneck:

AI capex

↓

More GPUs

↓

Optical interconnect

↓

Optical transceivers (800G → 1.6T → 3.2T)

↓

Each transceiver needs EML/DFB/CW lasers

↓

Those are fabbed on InP substrates

↓

$AXT(AXTI.US) (and Sumitomo) supply the substrates

Near term story is 800G/1.6T pluggables.

CPO inflection will be "late 2027 and beyond" (management guidance).

With 2X InP capacity by end of 2026. I.e. demand > supply.

And fresh capex in 6-inch InP R&D for next-gen EML/SiPho:

Larger diameter = more die per wafer = lower unit cost + is required by some advanced device roadmaps.

But ofc, a ton of pricing-in has happened already:

Probably looking further ahead to 6-inch InP ramp for 1.6T and probably even CPO (2027+ story).

Personally don't see anything wrong with trimming at these levels (I did last week to rotate some gains elsewhere)

But keeping some exposure makes sense imo since a ton of capex flows direct to them.

So we should see a QoQ improvement in reported earnings as backlog converts etc.

European Chips Act 2.0:

I don't see any info on new names receiving investment.

There are 4x reports all over 100 pages long lol.

But from European Chips Act 1.0:

Total investment of over €32B:

- $STMicroelectronics NV(STM.US): €5.73B

- $STMicroelectronics NV(STM.US) x $GlobalFoundries(GFS.US): €7.5B

- ESMC: >€10B

- Silicon Box: €3.2B

- Infineon: €3.54B

- ams OSRAM: €0.567B

- Ephos: not disclosed

- $ON Semiconductor(ON.US): €1.64B

- $GlobalFoundries(GFS.US) solo: not disclosed

- $XFAB: not disclosed

Note: these are not from Chips Act 1.0, not 2.0 from today.

Need to digest it all properly. So many words lol.

$Alphabet(GOOGL.US) AI Supply Chain ETF:

Since they're raising $80B to finance AI infrastructure expansion.

Total 2026 AI Capex: ~$185B [2x 2025]

Custom silicon / memory:

- $Broadcom(AVGO.US): TPU

- $Taiwan Semiconductor(TSM.US): TPU foundry + advanced packaging

- $Marvell Tech(MRVL.US): apparently in talks for inference TPU + MPU.

- Samsung: HBM

- SK Hynix: HBM3E

- $Micron Tech(MU.US): third source HBM

- $Sandisk(SNDK.US): NAND

Networking & optical:

- $Lumentum(LITE.US): R64 optical circuit switch, co-developed w/ Google + in production

- $Coherent Corp.(COHR.US): 400G/800G/1.6T transceiver

- $Credo Tech(CRDO.US): AECs linking TPU clusters

- $Fabrinet(FN.US): contract manufacturer for transceivers

Google cloud compute:

- $NVIDIA(NVDA.US): GPUs

- $AMD(AMD.US): GPUs, smaller exposure

Server ODM & power:

- $Celestica(CLS.US): primary TPU board + rack-level integrator

- $Vertiv(VRT.US): CDUs, liquid cooling + rack power architecture

- $Eaton(ETN.US): Switchgear, busways, UPS, electrification

- $Bloom Energy(BE.US): fuel cells

- $Corning(GLW.US): subsea fiber

Real estate / colocation:

- $Terawulf(WULF.US): hosts Google-backstopped AI capacity + Google holds warrants

- $Hut 8 Mining(HUT.US): 245 MW lease w/ Google financial backstop

- $Cipher Digital(CIFR.US): Fluidstack/Google HPC hosting

Just for a top level overview of potential direct beneficiaries.

There are ofc plenty of other names located in Taiwan/Korea like Wiwynn (6669) for server ODM flows.

But given the ~$460B cloud backlog, a large chunk of the raise will probably go to more memory since it's ~60% of capex.

Also TPUs since Google's thesis is replacing Nvidia with TPUs e.g. Broadcom.

How to Grow an Investing Account (without getting lucky)

I have 4 core principles:

1. Themes

2. Conviction

3. Concentration

4. DCA

-> 1. Themes

Follow the hot sectors at any given point in time.

- Which sectors are spending the most money?

- Which areas are governments supporting most?

- Which direction is the world going in?

Stock prices are forward looking and reflect future earnings.

So, which companies will grow earnings fastest?

Over the last ~decade, it was software adjacent tech like $Alphabet(GOOGL.US), $Microsoft(MSFT.US), $Meta Platforms(META.US), $Palantir Tech(PLTR.US).

Before that it was sectors like energy and banking.

Currently it's the AI supercycle, tracing Mag7 capex spend down the supply chain into sectors like photonics and memory.

In 2035, it could well be a space related supercycle e.g. a sector made up of companies building data centers on the moon.

-> 2. Conviction

Step 1 is easy.

This step is the hardest, but most important.

You need to do your own research to build conviction in the theme, sector and company.

Without conviction, this whole investing process I'm outlining becomes pointless.

The absolute simplest way to "research" is to read what analysts/researchers write. This is the bare minimum you should be doing.

The ramp up in your knowledge will be exponential.

Don't copy trade - AI is there if something in a tweet or article doesn't make sense to you.

Ultimately, you want to understand a company (and the investing thesis) where you're able to explain:

1. What they do

2. Why they matter

In 2 or 3 sentences, without using jargon.

First-principles thinking to get down to the true roots of the company.

If you believe in the company's story after doing all this - that's conviction.

And prevents you from selling out of positions too soon.

-> 3. Concentration

You're not getting rich and compound capital fast enough by investing in $SPY and having a small tilt towards $QQQ.

But you also don't want to full-port a high beta name like $Sandisk(SNDK.US) or $Applied Optoelectronics(AAOI.US) where your portfolio gets trashed if the stock goes down 20% in a day.

If under ~£250k, the approach I recommend is picking 5-6 "high growth" names of varying beta.

For example:

40%: $Micron Tech(MU.US) + $SIVE: for high beta AI

40%: $Marvell Tech(MRVL.US) + $Corning(GLW.US): for mid tier AI beta

20%: $Alphabet(GOOGL.US) + $NVIDIA(NVDA.US): for AI compounders

It's enough concentration so you see genuine % gains in your portfolio if any stock makes a big move up.

With some stability so you don't get ruined if a name drops hard for any reason.

Again, if you have conviction, you wouldn't sell on any dips since you'd have high confidence in the business.

-> 4. DCA

This part is entirely dependent on personal risk tolerance.

But generally, lump-summing into positions is not my preferred approach.

It can work though if you've done steps 1-3 properly and don't panic sell.

You're never going to perfectly call bottoms, so having some allocated capital spare to avg. down is a good idea.

Then DCA up when conviction in a company's story grows.

E.g. product qualifications, earnings beats, expanding deals/pipeline.

Assuming I have $1k for a position, I like to do something like:

1. $300 to initiate a position after a quick burst of research.

2. More detailed research over a few days/weeks i.e. Step 2 above: Conviction.

3. $300 if I build more conviction via deeper research.

4. $400 DCA over a few more weeks/months to build the position out on any dips.

The one caveat with this method is that you're never going to have the "best" avg. price.

But it helps build even more confidence in the trade.

Which is the ultimate goal with long-term investing.

---

The post's title was inspired by @naval's viral thread on How To Get Rich (Without Getting Lucky) - potentially greatest thread ever made. I read it a couple of times per year at least.

Holy $Dell Tech(DELL.US) ... +38%

New portfolio strategy:

-> 50% Trump stocks

-> 50% Leopold stocks

Easy.

Testing: The critical bottleneck in CPO mass production (TrendForce)

The current testing approach is manual + non-standardized.

Which creates a severe throughput bottleneck.

For Testing exposure:

-> $Formfactor(FORM.US): probe cards/systems

-> $Onto Innovation(ONTO.US): inspection + metrology

-> $Camtek(CAMT.US): inspection + metrology

-> $Keysight Tech(KEYS.US): photonic/optical test

-> $Viavi Solutions(VIAV.US): photonic/optical test

-> $Aehr Test(AEHR.US): burn-in + test

In case anyone wanted to do further research.

Names like $Teradyne(TER.US), Advantest, and Chroma ATE also fall here.

So since $Taiwan Semiconductor(TSM.US)'s COUPE targets volume production in 2026...solving the testing bottleneck is one of the key unlocks for CPO to scale.

Along with things like lasers, FAU, substrates, and advanced packaging.

Disclosure: I personally have a position in Aehr.

I'm genuinely impressed.

How did I nail two ~3x trades?

All while price was trending sideways for months.

1. Episil-Precision

2. Wafer Works

With:

-> Zero institutional research

-> Zero commentary on X

-> Zero institutions/algos following my posts

I can + will get stuff wrong.

But I think I deserve my flowers after calling two exponential trades in companies that no-one on X had ever mentioned.

$IQE Earnings + Fundraising Update:

Long-term bullish validation to the thesis.

Total Revenue: £97.3M (-17.6% YoY):

- Photonics: £57.1M (+15%)

- Wireless: £40.1M (-40%)

Very similar story to Soitec where a weak smartphone market is dragging back earnings.

But they're clearly focusing operations on AI/photonics segments going forwards:

With "multiple Tier 1 InP photonics design wins...for future volume production...for data centres"

"Accelerating demand for our InP solutions supporting data centre and AI markets is expected to be a material growth driver throughout 2026 and beyond"

Very clear inflection point rn where Photonics > Wireless segment. And demand/wins should flush through into future earnings.

Fundraising (£81M) update:

£81M Fundraise mostly from $Macom Tech(MTSI.US) will be used to clean up the balance sheet.

With admission of 332M fundraising shares to take place around Monday 1 June 2026.

For quick dilution napkin maths as of 28th May:

Pre-money equity value (980.4m @ 50.70p) = £497.1M

+ $Macom Tech(MTSI.US) cash = +£30M

+ CLN = +22.8M

+ Retail placing = +£13.0M

= Mechanical post-money equity value = £562.9M

Divide by 1.312B shares

= Fully diluted share price ~40-42p range

$Nebius(NBIS.US) is us 12.45% After Hours:

As Leopold Aschenbrenner discloses a 5.6% stake in Nebius.

The best Neocloud in my view.

Building an X generated watchlist:

Looking for ~$20-$80B names:

- In the AI supply chain

- U.S. or Europe only

Companies you have absolute conviction in only.

E.g. currently for me, that includes $Nebius(NBIS.US), $Lumentum(LITE.US), $Coherent Corp.(COHR.US) type names.

Ultimately, I've got a spot open for a high-growth compounder after making a sale last week.

So will either fill that gap with a new position, or just increase portfolio concentration if nothing tickles my fancy!

Holy...

SK Hynix is now a $1T market cap company.

Now the 12th largest company globally, overtaking Berkshire Hathaway.

And following on from $Micron Tech(MU.US) surging to $1T yesterday.

This run will live long in the memory (excuse the pun).

How $Ouster(OUST.US) actually competes in the market:

30,000 ft view + lidar adoption curve.

Four different pools:

1. Automotive OEM: fastest growing & mainly Chinese

2. Western Automotive/Robotaxi: their main auto opportunity

3. Automation, Robotics, Mapping: largest revenue pool

4. Smart Infra: software entry point

---

1. Automotive OEM:

Chinese car makers are standardizing 2-5 lidars per vehicle across their 2025-2027 models.

Companies like: BYD, Li Auto, Xiaomi, Great Wall Motor, Changan, Leapmotor.

This is the high-volume, low-ASP market.

Hesai's AT series sells at ~$150-400 per unit + Chinese OEMs are now the primary demand driver.

Hesai shipped 1.62M units in FY25 (+223% YoY) and is guiding toward ~3M units in FY26.

Rough estimate is that Chinese firms hold ~90% of the total automotive lidar market.

$Ouster(OUST.US) has no material share here + cannot compete on price at this ASP level.

This is a deliberate decision to not compete though + not to be conflated as an operational failure on their part.

Seen some misinformation here recently, so had to highlight upfront.

---

2. Western Automotive/Robotaxi:

This is $Ouster(OUST.US)'s main automotive opportunity.

Waymo, Motional, Zoox, May Mobility, and Baidu Apollo all need good + safe lidar.

ASPs are ~$1k-$5k per sensor depending on performance tier.

Volume is lower but design wins are multi-year.

$Ouster(OUST.US) has the Motional relationship (via Velodyne Alpha Prime inheritance)

And the Rev8/DRIVE Hyperion qualification, which directly addresses this pool.

---

3. Industrial Automation, Robotics, Mapping:

$Ouster(OUST.US)'s largest revenue generator currently.

Warehouse AGVs: Vecna Robotics, Cyngn, Balyo

Autonomous mining: Komatsu

Mobile robots

Professional mapping/survey

ASPs are ~$500-$3K per sensor.

Volume is growing at 30-50% annually.

This is less geopolitically sensitive than 1 & 2 above, but still subject to Chinese competition from the low end.

The Komatsu multi-yr deal (2025) is the example:

A multinational OEM paying a premium for a sensor qualified to its operations e.g. extreme dust/vibration/temps.

W/ a guaranteed 10-yr supply life.

And on robotics/physical AI: "The multibillion-dollar opportunity for functionally safe devices is a brand new area for us to expand in"

Pretty big TAM expansion coming like we all know.

---

4. Smart Infrastructure

- traffic management

- pedestrian safety

- crowd analytics

- intelligent transportation systems

All represent Ouster's BlueCity/Gemini market.

Global TAM for smart traffic sensors = ~$19B

This has the highest software attach rate + highest switching cost once deployed.

And U.S. federal funding tailwinds too.

---

Then for my view on where Lidar adoption is rn:

- Automotive OEM (China): Early majority -> Late majority. 3M+ units/year in 2026. Past the adoption knee.

- Western Automotive: Early adopter -> Early Majority. ~150,000-300,000 units globally in 2026. Waymo commercialization ramp + European regulatory approvals for L3 are probs the inflection triggers.

- Industrial Robotics: Early majority. AGV/AMR penetration is accelerating. Humanoid catalyst (Figure, Agility, Unitree) adds new demand beginning 2027.

- Smart Infra: Innovators -> Early adopter. Sub-5% of U.S. intersections deployed with lidar. TAM capture is still early.

---

As mentioned, just a *very* high level view.

There are ofc other nuances like their Fujifilm partnership which is v. bullish for colour lidar sensors for physical AI / robotics.

Memory Companies Forward P/E Estimates [May 2026]:

Sandisk ( $Sandisk(SNDK.US) ):

~22.9x [2026]

~7.4x [2027]

Micron ( $Micron Tech(MU.US) ):

~12.9x [2026]

~7.5x [2027]

SK hynix:

~6.9x [2026]

~5.5x [2027]

Samsung Electronics:

~6.8x [2026]

~5.0x [2027]

Data sources:

Sandisk: Bernstein (1 May)

Micron: BofA (13 May)

SK Hynix & Samsung: JP Morgan (18 May)

LTAs extending through to 2030 from hyperscalers have effectively transformed memory companies to have predictable SaaS-style revenue streams.

A paradigm shift to reliable earnings where suppliers hold all the pricing power.

Yet forward P/E multiples remain paradoxically compressed.

Bruh...

Since 2004:

- $SPY: +485%

- 1999 Charizard #4 Holo: +41,700%

Which cards are good investments?

(I know nothing about Pokémon)

Humanoid market could be $200B by 2035 (Barclays)

Exponential growth.

Current humanoid market = ~$3B

2035 base case = $40B

2035 upside scenario = $200B

MS assign a $5T TAM by 2050 also.

Physical AI will be the next major investing theme.

After the current software-driven AI investment driven by hyperscaler capex.

It's still *very* early, but have been conducting deep research in the background for a few months now.

Mainly around BOM analysis + value chain mapping.

From things like wiring/thermal to gears/reducers to actuators and motors.

Imo, the investing opportunity currently lies in Europe, not the US.

Due to:

- automotive heritage translating over to humanoids

- smaller MC's relative to US

- more pure-play humanoid suppliers relative to US

Along with China since they're leading on humanoid deployment currently.

Will do an article(s) on this all at some point.

It's just literally hundreds of companies to filter through to assess who the value chain winners will be.

Very fun research though!

We're still at the beginning of the CPO supercycle.

Bank of America report on Optical Interconnects & CPO:

Total Optical TAM expansion of 5x:

2025 = $14B

2030 = $73B

With a CPO contribution of $15B.

That matches to Goldman's low-end CPO scenario - based on $NVIDIA(NVDA.US) Vera Rubin / Rubin Ultra spec mix.

(GS high-end CPO TAM is $91B by 2028)

And just to note: BofA are *always* more conservative w/ projections than GS.

-> Regardless, BofA's CPO projections still have the same parabolic curve as GS, all the way up to 2030+.

"We are more optimistic about the ramp of CPO over the next several years given the clear performance and roadmap benefits"

"We estimate that CPO sales for optics (mainly lasers) will begin to inflect in CY28"

Just another confirmation on front-running institutions + supplier Earnings e.g. $Lumentum(LITE.US) / $Coherent Corp.(COHR.US) / $Marvell Tech(MRVL.US) / $SIVE.

Finishing up some research for next week:

1. $Ouster(OUST.US)

2. $Penguin Solutions(PENG.US)

Been talking about those two in real-time over the past few weeks, so will do a slightly more "formal" summary on my thoughts.

3. Ceres Power / $FuelCell Energy(FCEL.US) - more of a comparison

4. $ENSI (Ensilica)

I have a position in all of these incl. Ceres Power + $FuelCell Energy(FCEL.US), with a rough 70/30 split between the two.

Might look into $Harmonic(HLIT.US) too since it's all anyone's been talking about on X. No position though.

The Swatch stock price has done nothing since the AP collab was announced. LOL.

Probably because it looks like a toy that came from a McDonald's Happy Meal?

Great marketing/brand exposure though.

Core Themes:

CPU

HBM/NAND

Burn-in / test

Glass core substrates

ABF/InP substrates

800G/1.6T transceivers

CW lasers/ELS

SiPh foundry

InP epi

FAU

SiC/GaN

Fuel cells

Transformers

If it's not related to AI, the markets don't seem to care?

This $ServiceNow(NOW.US) sell-off seems way too aggressive.

They've got 600+ customers with an ACV over $5M lol (grew 22% YoY).

You don't sign multi-year deals that big if the platform is getting disrupted by AI?

Not sure what needs to happen for them to get re-rated.

Maybe rebrand to NowAI?

I don't have a position, but they're on the watchlist. Financials + guidance are too good to ignore.