Macro uncertainty is what's driving semis equities right now.
More than hyperscaler capex forecasts and other earnings releases.The Fed's policy meeting next week could lead to a hawkish surprise, which is resulting in institutional investors playing things cautiously at the moment. Ongoing US/Iran escalations -> rising oil prices -> prolonged inflation -> potential rate hike.- Brent crude up 35% in three weeks- US 10Y yield set for its biggest weekly increase since early May- Fed funds futures traders now price in a 36% chance of a rate hike decision next week by the Fed (up from just 13% last week) So ultimately, the prolonged war is having a negative second-order impact on semis. Which is why all your favourite names - from $Nebius(NBIS.US) to $Sandisk(SNDK.US) to $Applied Optoelectronics(AAOI.US) - are all moving in lockstep regardless of their individual sub-sector or any sort of business fundamentals.Another example is $Intel(INTC.US) erasing all it's post-market gains today after reporting solid earnings yesterday. That would not happen under any sort of clear/stable macro conditions.Business fundamentals for the semis will certainly superceed all macro uncertainty in the long-run.
AAOI 2X Long ETF
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$Applied Optoelectronics(AAOI.US)
You know what they say about bottlenecks. It is what holds up the progress of something. In AI, it used to be compute and chips like the GPU that Nvidia provides. They are still important but they are not the bottleneck at this point of time. Networking is one and amongst the many networking stocks in the AI sector, AAOI is one of my favourites.
@Captain's Treasure
Trade Showcase: Trade, Show & Earn Rewards! - H
$Applied Optoelectronics(AAOI.US)
AAOI is one of the important companies providing essential networking components in the AI sector. Their specialty is optics and they are expanding and ramping up just as demand skyrockets.
If AAOI can execute well and deliver, expect parabolic returns on this one. They have retreated to very attractive levels and look like they are looking for a bottom.
@Captain's Treasure
Trade Showcase: Trade, Show & Earn Rewards! - P
Tough to say if semis have bottomed now.
With most AI infra names having green days.- From $SIVE, $Aehr Test(AEHR.US), and $IQE up over 20%. - To $Sandisk(SNDK.US), $Micron Tech(MU.US) and $Applied Optoelectronics(AAOI.US) up over 10%.Regardless of today's returns, the next couple of weeks will certainly be more important for more clarity:- 22 Jul: $Alphabet(GOOGL.US) Q2: first proper gauge of the ~$750B hyperscaler capex year.- 22-23 Jul: $AMD(AMD.US) Advancing AI event: Roadmap read through for foundry loading + advanced packaging + laser type demand into 2027.- 23 Jul: $Intel(INTC.US) Q2: 18A yields + foundry commitments are probably the main variables w/ reads on US onshoring & packaging momentum.- 23 Jul: $IBM(IBM.US) Q2: already lost a ~25% of its MC so let's see how brutal the market is on guidance misses.- 24 Jul: 10% global tariff expires & new tariffs on dozens of countries expected. It'd be a stagflationary factor that feeds the overarching Fed hike narrative.- 27 Jul: Kimi K3 full weights released- 28-29 Jul FOMC: rate hold expected per experts + Polymarket. Important to bear in mind that rate hikes (or signals of one) would be the AI trade's first genuine regime shift.- 29-30 Jul: $Meta Platforms(META.US), $Microsoft(MSFT.US), $Amazon(AMZN.US) earnings: more capex datapoints.- 30 Jul: June core PCEAnd any day we could get a US-Iran ceasefire. There's still a 10 day proposal on the table while strikes keep happening. A proper/confirmed truce would help oil prices and helps semis.Just for a high level timeline of the "main" important events coming up soon.All have some kind of impact on semis to varying degrees. AI capex of course will be most important when the hyperscalers report earnings. - W
All of these popular retail stocks are currently up double digits or more today 🔥
$Nebius(NBIS.US) +17%$Applied Optoelectronics(AAOI.US) +16%$Cipher Digital(CIFR.US) +16%$Teradyne(TER.US) +13%$Western Digital(WDC.US) +13%$Micron Tech(MU.US) +13%$Sandisk(SNDK.US) +13%$Seagate Tech(STX.US) +12%$Coherent Corp.(COHR.US) +11%$Coinbase(COIN.US) +11%$AST SpaceMobile(ASTS.US) +11%$Ondas(ONDS.US) +10%
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Executive at POET on $Applied Optoelectronics(AAOI.US):
"AOI having their own laser source is a huge differentiator...The laser supply will continue to be constrained. The future networks, the laser power has to increase significantly."> 800G optics are positioned to remain a dominant mainstream workhorse for the next 12 to 24 months (with a solid 2 to 4-year total lifecycle), giving AOI a durable, multi-year runway before 1.6T fully takes over.> Owning in-house indium phosphide laser fabrication serves as a vital competitive differentiator and moat, insulating AOI from industry-wide component shortages and positioning them ideally for future high-power architectures like ELSFP (External Laser Small Form-Factor Pluggable).> Supply constraint in transceivers expected to last several more years. - P
I loss $Applied Optoelectronics(AAOI.US)
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$Applied Optoelectronics(AAOI.US)
This one has retreated quite a bit (in actual fact quite a lot!). However taking all factors into account, that is a good thing really and very healthy stock dynamics.
A stock that goes too parabolic is too speculative and a healthy one needs periods of digestion after an uptrend, much like this one.
Fundamentally sound, providing a very important component of the AI supply chain and in the midst of expansion to accommodate surging demand.
Upcoming earnings are important and need to reassure a jittery market.
@Captain's Treasure
Trade Showcase: Trade, Show & Earn Rewards! - H
$Applied Optoelectronics(AAOI.US)
If there is a moment of time when you wish for better prices so you can buy more, this is that moment.
AAOI might seem to have retreated a lot since its ATH but believe it or not, no major long term supports are broken and the long term bullish structure is very much intact.
The pull back has been a controlled descent characterised by overlapping candles and this wave best fits the C wave of a three wave pattern. Looks like a classical fourth wave. Price and time are coming together nicely. The wave looks complete to almost complete. Price has touched 38.2 retrace at 108. We are just above the previous high that price cleared with heavy volume.
I am expecting institutions to defend and accumulate at these levels.
Not financial advice. Just friendly sharing.
@Captain's Treasure
Trade Showcase: Trade, Show & Earn Rewards! - H
📢 𝐉𝐔𝐒𝐓 𝐈𝐍: $Applied Optoelectronics(AAOI.US) Applied Optoelectronics Expands Texas Manufacturing for AI Optical Transceivers
👉 𝐊𝐞𝐲 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬:➤ 𝐀𝐩𝐩𝐥𝐢𝐞𝐝 𝐎𝐩𝐭𝐨𝐞𝐥𝐞𝐜𝐭𝐫𝐨𝐧𝐢𝐜𝐬 begins construction on two Texas manufacturing facilities.➤ Expansion adds nearly 𝐟𝐨𝐮𝐫 𝐡𝐮𝐧𝐝𝐫𝐞𝐝 𝐭𝐡𝐨𝐮𝐬𝐚𝐧𝐝 𝐬𝐪𝐮𝐚𝐫𝐞 𝐟𝐞𝐞𝐭 of capacity.➤ New facilities are located in 𝐏𝐞𝐚𝐫𝐥𝐚𝐧𝐝, 𝐓𝐞𝐱𝐚𝐬.➤ Expansion supports production of 𝐻𝟎𝟎𝐆 and 𝐴.𝟔𝐓 optical transceivers.➤ Products are designed for 𝐀𝐈 and cloud infrastructure networking.➤ New capacity aims to strengthen AOI's manufacturing scale and market position.➤ Project is expected to support long-term growth and operational expansion.➤ Pearland expansion is expected to create 𝐡𝐢𝐠𝐡-𝐪𝐮𝐚𝐥𝐢𝐭𝐲 𝐣𝐨𝐛𝐬 and boost the local economy.👉 𝐄𝐱𝐩𝐞𝐫𝐭 𝐒𝐭𝐚𝐭𝐞𝐦𝐞𝐧𝐭𝐬:𝐃𝐫. 𝐒𝐭𝐞𝐟𝐚𝐧 𝐌𝐮𝐫𝐫𝐲, Chief Financial Officer and Chief Strategy Officer of AOI:“We are proud to be part of the Pearland business ecosystem and appreciate the level of support we received from the city and economic development offices to match our manufacturing needs. As we continue to grow and expand our Houston-area footprint, Pearland offers us access to a strong workforce, excellent infrastructure, and room to scale our operations. These facilities will be instrumental in supporting our long-term growth strategy, enabling us to expand production of advanced optical transceivers and strengthen AOI's position as a key supplier to the AI and cloud infrastructure markets.”𝐐𝐮𝐞𝐧𝐭𝐢𝐧 𝐖𝐢𝐥𝐭𝐳, Mayor, City of Pearland:“We’re thrilled to welcome Applied Optoelectronics to Pearland as they expand their manufacturing footprint. This project will bring high-quality jobs, strengthen our local economy, and deepen the innovation ecosystem that makes Pearland a destination for forward-looking companies. We look forward to continuing to support AOI as they grow and thrive in our community.” - S
Regarding $Amazon(AMZN.US) RNG + OpenAI’s MRC and VCSELs.
In what appears to be an indirect response on B. Riley's $Applied Optoelectronics(AAOI.US) sell report regarding optimizations that "flattens networks and cuts transceiver TAM 40-50%".Rosenblatt TLDR: They've already modeled for this, even though each XPU may use fewer transceivers.The number of XPUs is growing so quickly that total optical demand should still rise. On lasers architectures for CPO: VCSELs are useful as a credible bridge for NPO/short reach. Ideal architecture though for CPO is UHP CW over other lasers, and cites Broadcom for that statements. Which happens to supports my core $SIVE thesis. I feel like Rosenblatt and I share the same views on a lot of things, I like the way they roll.
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$Applied Optoelectronics(AAOI.US)
This is my optical networking pick for the next big beneficiary of the AI picks and shovels theme. Communications and networking is going to be big and crucial and whilst stocks have gone up, the earnings inflection point is yet to be reflected.
When the numbers come in, the important names in yet another AI bottleneck should rally even higher after this consolidation.
@Captain's Treasure
Trade Showcase: Trade, Show & Earn Rewards! - H
$Applied Optoelectronics(AAOI.US)
AAOI is one of my favourite optical stocks. She has retreated quite a bit from its ATH which provides a fantastic entry point.
Technically looks corrective as a fourth wave and price rebounded just above the 38.2 retrace at 109.
However, it is only three waves up so far and even though yesterday’s rally saw good elevated volume and can qualify as a third wave, price needs to confirm with another push to go past the third wave high of 127.46. That will confirm the five waves up and set up nicely for a bigger second wave buyable pullback for an even bigger rally ahead.
@Captain's Treasure
Trade Showcase: Trade, Show & Earn Rewards! - H
$Applied Optoelectronics(AAOI.US)
I am bullish long term on networking for AI which I believe is crucial and key for AI to scale and the focus has obviously switched from copper to optics with credo taking steps to pivot towards optics itself when copper is its strength. Not to say copper will be obsolete as they are still useful in short distances etc. However with CPO being the way forward, optics are here to stay and any dip is a good opportunity IMHO.
@Bridge Buzz SG
Trade Showcase: Trade, Show & Earn Rewards! - S
Just some notes on $POET Tech(POET.US) AGM and read through on optical markets:
- "The top three laser suppliers control 68% of the market, and they’re completely sold out for the next two years"$Lumentum(LITE.US) CEO said into 2028, so POET implicitly confirms laser shortage is going into 2029 now.- NRE with a new customer, building on POET’s interposer for high-power external light source.This is high confidence $SIVE as laser supplier given the Sept 29, 2025 PR on ELS, and new customer qualification would be material for revenue if it goes into volume ramp. - Poet expects Lumilens commercial agreement to scale to over $500 million over the next 5 years.Lumilens claimed a top-3 hyperscaler was their initial customer (Linkedin OSINT)- $830M cash on hand on balance sheet (this is more for Poet fundamentals).- "The entire optical components industry today is facing a severe shortage of critical components."Reaffirming what we know already regarding optical bottlenecks.- "Production ramp in the second half of 2026 this year." Just production timelines H2. In terms of $POET Tech(POET.US) volumes:- existing capacity around 1 million optical engines per year- projected demand exiting 2027 around 1 million optical engines per month- roughly 10x capacity expansionI don't own Poet, but if management delivers on these projections it directionally looks very positive.However something to note is that unlike other suppliers that have named hyperscaler customers to to back up capacity revenues like $Applied Optoelectronics(AAOI.US): $POET Tech(POET.US) seems more questionable.But this does look like a very positive outlook for $POET Tech(POET.US) if they match projections.
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Helping you understand today's market sell-off:
Paradis Macro Report [June 23]:-> KOSPI closed -9.99%:Second worst day this year, and fifth worst ever. With SK Hynix and Samsung both down over 12%.A few drivers:1. MSCI kept Korea in Emerging Markets which killed the passive inflows were estimated to be $24B (UBS).2. There was also forced deleveraging of retail leverage.3. Profit taking mainly driven by SK Hynix overtaking Samsung's market cap (viewed as a market top).4. Profit taking ahead of $Micron Tech(MU.US) earnings tomorrow.Retail investors tried buying the dip ($5.6B), which is the largest single-day retail net buy ever. But that wasn't enough to overcome the sell off.Looking at current volatility levels, the drawdown in Korea looks set to continue tomorrow as more retail investors are forced to unwind positions.-> The sell-off in Korea extended into US semiconductors:Nasdaq fell 3.2% and the SOX fell ~7.8%.With names like $Micron Tech(MU.US), $Sandisk(SNDK.US), $Applied Optoelectronics(AAOI.US), and $Coherent Corp.(COHR.US) all down over 10% today.AI stock price moves are largely memory-driven. If memory goes down, so do other AI adjacent names (usually).However, it is crucial to remember that the memory supercycle is still in tact w/ sold-out capacity all through 2026-27. Plus hyperscalers forecasted to spend up to 50% of 2027 capex on memory alone as per SemiAnalysis.-> Micron earnings tomorrow:I'm personally expecting Micron to report sublime earnings and guidance tomorrow. However, do not be surprised if the market sells the report just like last quarter.And if you've read my previous reports, you'd note that I have been firmly against using leverage for the past few weeks.Today's events are proof. - H
📢 𝐉𝐔𝐒𝐓 𝐈𝐍: ClassOne Lands Record Order From $Applied Optoelectronics(AAOI.US) Applied Optoelectronics for AI Photonics Expansion
👉 𝐊𝐞𝐲 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬:➤ 𝐂𝐥𝐚𝐬𝐬𝐎𝐧𝐞 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 received its 𝐥𝐚𝐫𝐠𝐞𝐬𝐭 customer order ever from Applied Optoelectronics.➤ Applied Optoelectronics ordered multiple 𝐒𝐨𝐥𝐬𝐭𝐢𝐜𝐞 𝐒𝟖 wet processing systems.➤ Systems will support expanding 𝐨𝐩𝐭𝐢𝐜𝐚𝐥 𝐝𝐞𝐯𝐢𝐜𝐞 production in Houston, Texas.➤ Order supports AOI's transition to 𝟔-𝐢𝐧𝐜𝐡 𝐈𝐧𝐏 wafer manufacturing.➤ Demand is driven by growing adoption of 𝐀𝐈-𝐟𝐨𝐜𝐮𝐬𝐞𝐝 optical interconnect technologies.➤ Yole Group projects the 𝐬𝐢𝐥𝐢𝐜𝐨𝐧 𝐩𝐡𝐨𝐭𝐨𝐧𝐢𝐜𝐬 market to grow about 𝟑𝟎% CAGR through 2030.➤ AI-driven optical interconnect infrastructure is projected to expand at 𝐨𝐯𝐞𝐫 𝟐𝟎% CAGR.➤ Solstice systems are now deployed across the world's 𝐭𝐨𝐩 𝟓 photonics device makers.➤ ClassOne continues expanding its presence in 𝐡𝐢𝐠𝐡-𝐯𝐨𝐥𝐮𝐦𝐞 photonics manufacturing.👉 𝐖𝐡𝐲 𝐈𝐭 𝐌𝐚𝐭𝐭𝐞𝐫𝐬:➤ Optical interconnects are becoming critical for scaling 𝐀𝐈 𝐝𝐚𝐭𝐚𝐜𝐞𝐧𝐭𝐞𝐫 performance.➤ Rising photonics demand could benefit suppliers across the 𝐀𝐈 𝐢𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 ecosystem.➤ Record order highlights accelerating industry shift from 𝐞𝐥𝐞𝐜𝐭𝐫𝐢𝐜𝐚𝐥 to optical connectivity.👉 𝐄𝐱𝐩𝐞𝐫𝐭 𝐒𝐭𝐚𝐭𝐞𝐦𝐞𝐧𝐭:➤ "The continued growth of AI datacenter infrastructure is placing new demands on both scale and process consistency in optical device manufacturing. These additional Solstice systems will support our expansion in Texas, and having ClassOne's world-class wafer processing technologies in house will help us speed our production ramp." — 𝐒𝐭𝐞𝐩𝐡𝐞𝐧 𝐇𝐮, Deputy Director of Wafer and Chip Production at AOI.➤ "This milestone order is not only a validation of the performance and scalability of our Solstice platform, but also a clear signal of where the industry is heading. We are in the early stages of a major architectural shift in AI datacenters toward optical interconnects. From transceivers today to co-packaged optics tomorrow, photonics will play a central role in enabling the next decade of AI growth." — 𝐁𝐲𝐫𝐨𝐧 𝐄𝐱𝐚𝐫𝐜𝐨𝐬, CEO of ClassOne Technology. - H
⚡ 𝐔𝐏𝐃𝐀𝐓𝐄: Optical cable maker WCFO to add Cambodia capacity amid AI boom - $Lumentum(LITE.US) $Corning(GLW.US) $Coherent Corp.(COHR.US) $Nokia Oyj(NOK.US) $Applied Optoelectronics(AAOI.US) $POET Tech(POET.US) $Amphenol(APH.US)
Hong Kong manufacturer WCFO will roughly double production capacity for fiber-optic cable components in Cambodia to meet rising demand for data centers as the boom in investment related to artificial intelligence spreads to Southeast Asia. - F
$Corning(GLW.US) is my favorite Optics company. It's tough to chase these $Applied Optoelectronics(AAOI.US)'s and $Ciena(CIEN.US)'s when there is really an excellent fundamental company who has moat on multiple verticals.
They have more than 100 years of experience in Glass business and leaders there. $Apple(AAPL.US) needs them, $Alphabet(GOOGL.US) needs them, Samsung needs them, and now Datacenters & $NVIDIA(NVDA.US) needs them. A LEADER IN EVERY SENSE. Fun fact: Thomas Edison famously placed his first order with Corning on November 17, 1880. My next PT: 250
- S
Trendforce reports that $AMD(AMD.US) is actively trying to secure CW laser supply with multiple major procurement orders...
Is probably just the start of the bottleneck? There's not much independent capacity in Western supply chains left other than $SIVE or $Applied Optoelectronics(AAOI.US) and maybe Macom. Especially after Lumentum/Coherent got locked up with multi-year agreements with Nvidia. (disclosure, own Sive and aaoi)Lumentum is already CW laser constrained and is likely buying off Japanese companies like Sumitomo/Furukawa if I had to guess per ER, and those are probably running at max capacity. From the Trendforce report, this is:"to ensure that its future capacity will not be constrained by NVIDIA and other major Cloud Service Providers (CSPs)."I wouldn't be surprised if other hyperscalers like Amazon, Microsoft, and others saw Nvidia / AMD signing LTAs, and are trying to secure capacity next. A lot of it is game theory on not getting choked out by competitors, and looks like AMD is tipping the first domino after Nvidia.But my opinion is that this just goes and show how invaluable this CW laser chokepoint is and the companies are inside it.
