Serenity

Just your normal Monday correction in the AI space from $NBIS to $LITE to $AAOI? Source: Serenity

Next year… I’m expecting there to be many articles about FAU + component bottlenecks.

Especially as the new CPO architecture led by $NVDA + $TSM starts to scale.

Then a lot of these names like FOCI (~$2.8B MC) or Nextronics (~$246M MC) that I’m mentioning today will be in the center of it.

Despite many of these “commodity” labels… (just look at transformers/NAND)

And I’ll do a “Did you listen anon post” like $AXTI. 

We’ll see if this is right.Source: Serenity

I'm not sure why people look at 13F filings so deeply when all the hedge funds are super behind on names like $JBL, $LITE and others.

The most returns come from frontrunning institutions before they figure out the next $SNDK.

Not following them 3 months after they file.Source: Serenity

Wow, 27,500 paid subscribers is an insane number on X.

That’s enough to help put a 1 fun billboard somewhere in SF?

But will keep sharing a lot of ideas, despite current market drops! 

Got a lot of fun $SOI type monopolies in mind as your countries play supply chain warfare. Source: Serenity

Is it just me…

Or does it feel like everyone on X or $RDDT made millions off of $INTC, $MU, and $AMD recently? Source: Serenity

People wonder why I'm focusing on non-US markets recently.  

Why? CPO is my #1 thematic long. 

Markets don't know yet, the sudden paradigm shift in photonics...

I was one of the only to frontrun the current supercycle in 2025 w/ $AAOI @ ~$30, $LITE ~$300s, and $AXTI at ~$13 on X.... 

With the actual receipts and thesis that others can't show. 

CPO goes from ~$0. To $91 Billion TAM opportunity.

In the next 1 1/2 years from GS research. 

While overall optical market reaches $154B. 

Many players that had little exposure to the current photonics cycle at all: 

-> In Europe with high-end lasers design like $SIVE or $SOI with substrates. 
-> In Taiwan with Foci (3363), Nextronics (8147), Shunsin (6451) and others for optical components and foundries.  
-> In Japan with laser mass production, substrates, and chemicals. 

Are suddenly the new dominant players for CPO. 

As for US players, there's not much exposure. But the existing ones like $LITE, $COHR still get upside from CPO as that's their new growth vector. 

My contrarian thought process on current players:

Is that most of their valuation is priced in huge legacy pluggable revenue that will inevitably face cannibalization over time, so re-rating potential is less unless someone uses leverage. 

A lot of these new purer play CPO names go from 0 to 100 extremely quickly one mass production starts H2 2026 for scale out (as a revenue bridge) into H2 2027 for scale up (massive growth driver). 

Markets usually price things in 8-12 months ahead of time too... 

I have high conviction thematically in my supply chain research despite any market volatility leading up until then.Source: Serenity

I had a decent month.

Everything from: $AAOI went up 100% to $SOI went up 153.9%. 

$SNDK +70% or $INTC + 97.7% or $MRVL +54% or $ARM +41.5% were underperformers for me personally.

Curious how you all did?Source: Serenity

I've monitored the situation for you.

TLDR on hyperscaler capex spend (signal aside from $TSM). 

From $MSFT, $AMZN, $META earnings: 

Upstream semi supply chains go brrr.

$META: 2026 FY capex $115-$135B
Revised Q1 ER: $125B-$145B capex raised. 

-> Higher component prices (price hikes)
-> Aggressive AI infra spending
-> Custom Model Training

$MSFT: was actually $31.9B vs ($35.29B) but due to supply chain bottlenecks, rather than lack of resources. 

Still waiting for confirmation around $AMZN but their original capex projection was ~$200B from Jassy's note earlier this year.

So you can sleep easy, all the semi supply chain names still likely to keep going brr next quarter, since there's so much capex funneled into them.  

Then you get the new fed chair who is gung-ho all in on AI + rate cuts, with Jerome keeping stuff chill in the back (which markets probably like)Source: Serenity

$SLNH is a shtco like $BKKT, $ASST, and $IREN.

That is actively diluting everyone with a $500M ATM.

Not sure why anyone even listens to a guy who has consistently crashed retail portfolios over and over.

I’m going to watch them raise $500M off retail bagholders that get diluted to $0.

Then say “we have $500m on our balance sheets, MC should be higher” and award themselves SBC off the ATM. 

They’re all absolutely terrible longs.Source: Serenity

What an insane day for photonics.

$SIVE up 31.3%
$TSEM up 23.1%
$AAOI 20.01%.

It feels like a lot… but this just means you’re early to the next supercycle and there’s a lot of room to go.

Lot of people on X ask what’s next after $SNDK?

Here they are. Source: Serenity

Uh, was there any news with $POET …

Or does the universe just not like short sellers? Source: Serenity

Enplas (6961) at ~$985M seems kinda interesting. 
 They hold two chokepoints:

1. Dominant supplier for MLAs (micro lens arrays). Eg. SiPH switches, 1.6T, 3.2T for photonics.  
2. Oligopoly supplier for IC Test sockets (AI Chip Testing) 

Cash on hand: ~$155M, no debt.  Equity-to-Asset Ratio: ~89% (50%+ usually is solid), so low downside risk imo. 
 And their speculated customers: 

1, Photonics (MLAs): Highly probable: Innolight, Eoptolink, Furukawa, Intel (SiPh). And prob $COHR, $LITE.

2. GPU/ASICs (Test Sockets): prob $TSM, ASE, types use these to likely test $NVDA GPUs, $GOOGL TPUs (Google Ironwood is highly probable).

"expanding mass production orders for major GPU manufacturers, and for ASIC-related projects for hyperscalers." 
Then at OFC:

OFC: “We will be showcasing our new products for 800Gbps and 1.6Tbps transceivers and CPO (Co-Packaged Optics) that support today’s rapid technological advancements in AI.” 

Basically you have a company that supplies T1 semis, foundries, hyperscalers, that benefits from 1.6T from MLA photonics segment + CPO TAM expansion later from OFC products.  

Was one my positions wanted to share my thoughts about since it seemed p cool at sub <$1B MC.Source: Serenity

“Robotics may be the biggest product category of all time” - $CDNS CEO.

“The projection is $25 trillion. The whole GDP of the world is $110 trillion. So this is huge if this happens.”

Extremely bullish on robotics/humanoids directionally.

But maybe it’s time for $TSLA and America to really start prioritizing how we build it outside Chinese supply chains?Source: Serenity

Donald Trump is apparently long Sushi. 

I genuinely find it hilarious the President took a large % ownership of Kura Sushi ( $KRUS, ~$600m MC).

Among everything from $AVGO to $NVDA. 

If Trump did buy $5M worth, the president would own close to ~.8% of one of my favorite US Sushi Chains.

Don't have any open positions... but I do love the idea of our President buying up Sushi restaurants.Source: Serenity

$LPK / $LPKFF earnings are out. 

Seeing a lot of very dumb commentary on X. If you're wondering how to analyze qualification-cycle players, it's the same as $AEHR. 

Nobody cares about current earnings unless there's something extremely bad. If your revenue declines -8M euros before any volume ramp, it doesn't mean anything. 

The only reason why LPKF is a long anyway is 2027 LIDE glass core substrate mass production. 

Main thing to look at is earnings call in 2 hours not current financials and indication of high volume production + customers. 

People made this same mistake with $AEHR selling off on previous financials instead of listening to the call.Source: Serenity