Serenity @aleabitoreddit

Few earnings TLDRs with my favorite $AXTI and $AMZN: Amazon: - Raised 2026 capex to $220B vs. prior $200B (partly due to higher memory costs, which is bullish on $MU to Samsung) - Even at $220B, Amazon will not have enough capacity to meet all 2026 demand; Jassy expects the same in 2027. - Most incoming 2027 capacity is already reserved, with substantial 2028 capacity also reserved. Mostly read through on upstream semis. $GOOGL, $META, $AMZN, and $MSFT all identified compute shortage. All the narratives a few weeks earlier was "excess compute" from Meta and others + hyperscalers cutting back on spend... All BS. Amazon earnings was very bullish on AI semi trade. AXTI: - AXT to double InP capacity during 2026. Then double again in 2027. This is expected to make AXT "by far the largest indium phosphide producer in the world." - LFG - Q2 rev was $47.6M, the highest quarterly revenue in AXT history (InP revenue reached a record $30.7M, from DC applications.) - Revenue increased 77% sequentially and 164% year over year. - InP revenue-capacity targets: $60M per quarter exiting 2026. - $130M per quarter exiting 2027 That $130m target could be hiked too since management stated they find "whatever ways to increase that capacity expansion" - Management said the reported backlog remains well above $100M, but that number no longer reflects all available demand. "Customer demand continues to outpace supply, no matter how fast we add capacity." 800G/1.6T is driving the current cycle, while NPO/CPO extends it beyond 2027. Also they're targeting 50%-plus gross margin: "We should definitely be targeting a number that begins with a five." China demand more than doubled, and their agreements with Casela, $COHR and $LITE did not materially drive Q2. This is not even considering my projected massive ASP hikes yet as InP substrates get more bottlenecked. TLDR: - Amazon too much compute demands, needs capex to fufill it, so upstream semis go brrr. - AXT world largest InP substrate supplier, high gross margins, expansion, and supply can't keep up with demand. Bullish on demand side from Amazon + capex. Bullish on upstream optical supply chains from too much demand.

@tsorfF7 $AXTI casually up 64% today lol, just a normal day in your markets.

Did Citadel really just liquidate Situational Awareness… Then brought up entire markets the next day? $NBIS +26.25% $IREN +25.96% $SHAZ +22.82% $SNDK + 23.98% $BE +23.67% $SKHY +16.98% $INTC +12.16% Amid many others. This has gotta be one of the wildest liquidations I’ve seen.

There's a lot of stupid commentary around Leopold raising funds. After names like $BE, $SNDK, $SHAZ, and others all had very sharp drawdowns in July. Just remember... here's a man in finance that's 1. 6'5 2. Blue Eyes 3. Hedge Fund Probably better looking than you, and was up 439% through June YTD. Regarding the drawdown, Aschenbrenner acknowledged that the fund had "not been immune" to the market turmoil, particularly in Asia. FT separately reported that leverage amplified both its extraordinary gains and recent losses. He described the sell-off as potentially the best buying opportunity since early 2025 I'd agree with him and hope he succeeds with the raise. Since a lot of the current selloff looks like it overshot its mark through forced deleveraging.

@A22GEO The $POET optical interposer piece is actually a very interesting update and talks about $SIVE. Since it's a material timeline upgrade wording for "production" EOY 2026, for Sivers + Poet. Back when Sivers did their PR it was "production readiness"

I don't think I (or anyone else) can accurately call the bottom. Otherwise they would just do weekly options if they knew. It's hard to see some of the names drop any lower though, like $AAOI is close to 1x annualized fwd revenue/MC. $POET dropped so much that it's roughly ~$800m cash to $1.08B MC. In general, even Leopond finds current valuations extremely attractive, so he's raising more to buy the drop. Who knows though? But medium-long term, for my own thesis, I expect them to play out once revenue projections hit earnings. I've reiterated end of H1 2027 for $AAOI in terms of revenue inflection.... H4 2026 for $NBIS revenue inflection, and so on for my own ests. Of course, lot of volatility in between then.

Just some interesting takeaways from $FORM earnings call on CPO: Since they attributed systems revenue nearly doubled due to: "accelerating growth in co-packaged optics or CPO". Q1 2026: "we now expect 2026 CPO revenues to come in at the high end of the $10 million to $20 million range" Q2 2026 (now): "expect to exceed that range by the end of the third quarter, and to significantly exceed the $20 million level for the year overall." Management stated "We’re seeing some significant acceleration in this [CPO] business". Q: CPO adoption outlook. Are we perhaps expecting the timeline to accelerate a little bit? A: "What I would say is there’s acceleration here in the very short term." But management stated there's not a significant pull-in on timelines. Citing production infrastructure (not just R&D) for: - The growing volumes of CPO chips planned for later this year + test insertion for scale-up and scale-out switches. - Seems like that CPO piece flows through $TSM COUPE [ likely maps to $NVDA CPO products] - "The CPO piece does flow through that 10% customer" So now, test is ramping given management cited growing volumes of CPO chips. "The rapid recent growth of our CPO business is an exciting development, which we believe represents the very early stages of widespread adoption of silicon photonics in the broader semiconductor industry" TLDR: Fundamentally, CPO as a theme is very early, and should start to go brrr soon since it's starting to show up in earnings now (equipment/test players usually appear up first before optical engines / laser volumes ramp). Personally once all the deleveraging stops, I think markets will start to care more.

@Jespabe Not really, it's accounting framing. Microsoft investment expectations are the same but it's $175B for 2026 instead of $190B for 2026 because of how they reclassified DC leases. So roughly the same projections.

True, right now markets just want FCF + large warchests or dividends/buybacks I guess, like $AAPL. I'd agree with Zuckerberg that although it compresses near term FCF, they'll be rewarded over time with long term growth. As a shareholder, probably better to prioritize long term growth over a low-growth FCF then buybacks company as seen with $PYPL's returns.

Just some takeaways from $META | $MSFT earnings calls: Microsoft: - Expected to be FCF positive in 2027, despite the increase in capex (extremely positive for AI buildout that it's funded by operating income) - "Free cash flow was $19.6 billion, reflecting higher capital expenditures" - Quartely capex was $41B, roughly 2/3rds were "short lived assets, primarily CPUs and GPUs" - Expects capex spend will be over $50 billion for next quarter - Capex Guidance at ~$175 billion and 2027 capex roughly the same. Spending plans unchanged and in line. - "Extending the estimated useful life of our data centers from 15 to 25 years" - "We will be among the first cloud providers to deploy next generation rack-scale AI infrastructure based on $AMD Helios and $NVDA Vera Rubin" - "Customer demand continues to exceed available capacity" Meta: - Capex $130-$145 billion (narrowed range), from $125B-$145B. - Meta is receiving offers at a "significant premium" to what they paid for it (compute scarcity, positive for neoclouds like $IREN / $NBIS ) - Expects significant portion of compute (like the 1 GW DC in El Paso) to develop internal models. - Meta has multiple ROI-positive uses for additional compute across its core business (internally, not Meta Compute) - "Finally, we believe that overall industry capacity is going to remain tight for the foreseeable future" - "The industry has under-built historically for the wave of AI adoption, making existing capacity, including our own, extremely valuable" - Susan Li TLDR: - $MSFT and $GOOGL largely sustaining AI capex buildout while remaining FCF positive or through operating incomes. - $META flags available compute materially below demand at least through 2027. And $MSFT also flags compute demand far exceeds supply. - All three hyperscaler capex largely in line with Google hiking capex figures. AI selloff seems extremely overblown now, hyperscalers continuing capex in line (with Microsoft being FCF positive) or even hiked with $GOOGL. Compute scarcity is visible throughout every single hyperscaler ER.

$AXTI secured LTA with $COHR earlier, with a $22.3M reservation payment. As well as a LTA with $LITE today, totaling $87M ($43.5M + $43.5M) again to reserve capacity. Considering that these are both of the two leading optical players, seems positive. The actual details such as pricing of the contracts aren't known, so we'll find out more.

$AXTI enters long term agreement with $LITE for InP substrates. Lumentum has agreed to pay a deposit of $43.5M as a reservation for capacity.

I personally quite like their fundamental position right now after Mirantis acquisition, existing GW scale capacity, and leaked Anthropic memos of securing compute in places like Australia. They’re sitting right in the middle of a massive bottleneck. As a proud shareholder, main concern still is improving financing structures (not with ATMs) and removing the excessive CEO SBCs -> having them try for appreciating share prices rather than share count. Two fixes and I think other shareholders will be happy.

To show solidarity with the $IREN holders: I now own 1 share of IREN.

Global indiscriminate AI deleveraging right now, $AAOI is one of the high-beta names affected. I'd personally be surprised to say the least if they do $5.6B annualized revenue in 2027 (off of $471m/month projections), and remain a $6.3B company. $LITE annualized right now is ~$3.23B and they're a $48B company (but higher margins)

I kinda expected it for critical minerals since Western needs as much subsidies as possible to compete with China. US Gov taking a stake in $GFS for CPO was not on my calendar. But it does go to show CPO becoming a compute supply chain priority and they made Globalfoundries a domestic champion. Which my thoughts are that it's positive for all the Western players this US CPO supply chains like $LITE / $SIVE. Not so much for other parts of the world.

@4intheflames I don't own $GFS, but I'm personally it's surprised it's still down on the news US Gov is taking a direct stake in them for advancing CPO. Surprising to say the least, given everyone remembers $INTC as the latest foundry the US Gov liked.

US Gov to take 1% stake in $GFS, and award them $300m for the US CHIPS ACT. This is actually a strong read through on $SIVE / $LITE, given this CHIPS ACT is specifically aimed at advancing CPO + Silicon Photonics. (For reference, Sivers and Lumentum were the only two public laser suppliers named in GFS presentation slides. Sivers laser arrays was named recently as a reference design in Globalfoundries SCALE for CPO). Per US Gov announcement: "GlobalFoundries will receive up to $300 million to accelerate domestic CPO R&D by two to three years" (NIST) Never thought we'd see the US Gov / $INTC foundry playbook for CPO in specific...

I personally see it as extreme short term deleveraging that overshot many individual names. - $BE to $TER reported blowout results, with Bloom reporting 166% Y/Y rev growth + expanding margins + raised 2026 guidance... Teradyne reported 104% Y/Y revenue growth with 300%+ EPS growth. Your leading optical players over in China reported amazing preliminary earnings + extremely strong read through for the Western photonics sector. Think earnings season tend to remind markets about continued AI acceleration. I'm expecting $LITE, $SNDK / SK Hynix, and sector leader ERs to continue that trend. But it does feel like markets are rewarding existing acceleration more rather than future growth a year out over near-term revisions as seen with $AMKR. But as a TLDR, looks very positive for the themes I'm tracking. - Then you have $GOOGL capex raised to $195-$205B, which is typically the biggest AI demand signal from hyperscalers. - 77% 0bps change est. next FOMC decision from prediction markets. Trump administration on Monday called for the Fed to lower interest rates. So your 3x rate hikes fears this year seem kinda overblown. - Chinese fears from DUV to $CXMT overflooding are extremely overblown as well. We see this with every sector from time to time until people remember that lasers or HBM bottlenecks for a reason. As for personal thoughts, it was unhealthy seeing everything rise up or down together, especially with these themes. But I'm personally not worried since I have full conviction in my names, especially optical interconnects like $SIVE or $AAOI. $META compute and $GOOGL GCP margins/growth shows increasing demand for $NBIS and similar neocloud business models. $META + other hyperscaler notes around LTAs with $SNDK and Samsung/SK Hynix, $MU point to structural memory demand. Can go on and on... But when you have Jim Cramer telling every margined DC trader to "sell everything" at market open and news saying there's an AI bubble. I do hate it when others say "it's dropping so sell". My belief is that the important thing to look is accelerating revenue/EPS growth. And if that thesis stays in-tact with revenue acceleration in line with hyperscaler capex. TLDR: I see signs of AI demand / revenue acceleration, hyperscaler capex is one of the most important things to track. And my guess is that we'll see the theme recover broadly. But I can't predict what hour, day, or week that happens.

@wannabepanacea I've been out if it recently, just recovering from 2 rounds of surgery. Drop was been surprising to say the least given $GOOGL hiked capex guidance last week. Will need to check on rate hike odds, but my guess is just deleveraging.

FCC set to ban Chinese imports of humanoid and quadruped robots per Reuters. To protect American Humanoid/Robotics programs. Agility Robotics ( $CCXI ) and other US humanoid players should be happy to hear this.

Wow, $CMXT is up a very normal +469.98% after going public today. Now valuing it at ~$487.31 billion, up from $85.5 billion. Did any of my Chinese followers buy into the IPO?

Nvidia in talks to backstop $250B worth of OpenAI DC financing. - Softbank’s SB energy develops 10 GW Ohio campus - OpenAI signs long term lease - $NVDA guarantees $250B in financing - OpenAI discussing separate agreement to buy up to $350B in Nvidia chips. Not quite sure if this circular financing is healthy long term, but given the massive size of AI infrastructure spending… Feels like capex beneficiaries will be extremely happy.

Just some TLDR news: - $CXMT IPO tomorrow if you like Chinese memory. - Samsung Electronics reportedly struggling to secure large FC-BGA substrates. Ibiden (4062) reportedly requested LTA guarantees, Samsung Electro-Mechanics sought prepayments. - Samsung + $AVGO sign memory + foundry AI framework through 2030, expected to exceed $200b - $SOI expects FY2027 silicon photonics revenue to double compared to the previous year, surpassing Morgan Stanley's 60% growth projection. Photonics thesis go brrr. - SK Group + $NVDA sign $500B+ partnership to build out AI DCs and HBM4 memory. - SKC Absolics glass core delay to 2027 from reports. Targeting final reliability testing EOY, mass production next year. So if you're curious, this does push back some ramps from $LPK and others (hence drop on ER). - $QCOM price hikes by double digits for smartphone processors, due to upstream supplier hike pricing. - $META expected to issue $12B in project-level/SPV financing for El Paso, Texas AI DC expansion - Naver announced a $10 billion investment from $NVDA and Brookfield to construct a 1GW-scale AI Factory. Near term plan is 200MW by 2028. (Nvidia $1B investment, Brookfield nonbinding $9B) - 64GB DDR5 server modules rises 146% versus end-June contract pricing - $INTC brought forward 14A process mass production by a year, risk production H2 2027 and volume production in 2028, vs. 2029 HVM expectations. - Samsung Electro-Mechanics wins $200m MLCC order (existing bottleneck). - $AMD (the Bandana bottleneck), announces Helios is in full production with shipments Q3 2026. Including an up to 2GW MI455X GPU deployment with Anthropic and a 6GW infrastructure rollout with OpenAI. Gave new >50% CAGR TAM to $220B by 2030 from $26b in 2025 for CPU market. Rolls out optical interconnects for Mi500 in 2027. From channel checks, AMD is heading down to the CPO route (seems likely to use Ayar). - $ORCL wins $7B Department of War enterprise software contract - JX metal doubles semi target capacity at its KR subsidary with a 4B yen investment, with operations to begin H2 2027, amid surging demand from major customers Samsung Electronics and SK Hynix - Tungsten hexafluoride spot prices surged 2.1-2.5x Y/Y following Japan's Kanto Denka and Chuo Gas announcing permanent production halts. Fluorinated liquid supply faces a vacuum as 3M plans to exit PFAS production. - From the four optical chipmaker earnings, Yuanjie/Eoptolink/TFC Optical/Dongshan Precision: no major order cuts, 1.6T shipments expected to accelerate into 2027. Optical chip suppliers expected to capture outsized margins from shortages. - Unitree Robotics Targets 30,000 Humanoid Robot Production Capacity by 2026. Read through on humanoid TAM scaling like $CCXI and others. - Energy storage lithium batteries orders increase first half orders by 2,900% apparently in China. Not as familiar with EVE Energy and other battery makers.

Feels like every other car you see in SF is a Waymo. Short-medium term I see it as negligible impact to $UBER and $LYFT. Long term I see them cooked in US markets unless they act… Since autonomous vehicles can compress cost/margins of human ride shares by a lot. Then robotics can compress cost of delivery if Waymo launches a competitor to Uber Eats. Just like how people compare uber/lyft costs before rides, what people care about is lowest cost out of the bunch, and directionally Waymo/$TSLA would likely win there