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 substratesNear 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.
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