COHR · Coherent, Inc.Coherent, Inc.
🔬 Photonics supply chain entering supercycle with CPO as compelling theme; rotated from LITE/COHR into SIVE for greater upside
Photonics supply chain entering supercycle with CPO as compelling theme; rotated from LITE/COHR into SIVE for greater upside.
Evidence & details
- +CPO TAM goes from $0 to $91B according to GS research.
- +Author successfully frontran the previous photonics supercycle with AAOI, LITE, AXTI.
- +Many players with little exposure to current cycle (like SIVE, SOI) become new dominant CPO players.
- +Markets typically price in 8-12 months ahead of mass production milestones.
- ⚡Mass production start H2 2026 for scale out.
- ⚡Scale up in H2 2027 driving massive growth.
- −Existing US players (LITE, COHR) have legacy pluggable revenue that may face cannibalization, limiting re-rating potential.
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Post Timeline · 7 posts
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…
Thesis: CPO (co-packaged optics) is the #1 thematic long with TAM going from $0 to $91B. New dominant players in non-US markets (Europe: SIVE, SOI) and existing US players (LITE, COHR) stand to benefit. Legac…
@Shiboo9019 The base case scenario is they become more of a US Innolight/Eoptolink (which are still valued at $50B+) if they don't manage to scale up laser capacity and buy from $COHR. If they even hit 60-70% of their targets should re-rate a ton anyway in my opinion. So thes…
Thesis: SIVE could become a US version of Innolight/Eoptolink, which are valued at $50B+, leading to significant re-rating even if they hit 60-70% of targets.
We’re seeing third order effects in markets with $LITE, $AAOI, and photonics having a bloodbath, dropping 10%+. It’s multifaceted, with sector drop from Sandisk -10%+ and others selling off as well. But my nuance take is that the entire Japanese supply chain will likely run out…
Thesis: Japanese export controls on InP will cause supply chain constraints for western photonics players, affecting LITE, AAOI, COHR, and potentially exacerbated by AXTI's monopoly, leading to continued sell…
@ManglaniAkshay @LogicalThesis So I actually like $COHR more than $LITE right now and sold my LITE positions at ~$385. I did some internal research the other day and found some potential issues but didn't publish it yet. That being said it's still a good long but not as high c…
Thesis: Sold LITE positions at ~$385 due to potential issues found in internal research. Still considers LITE a good long but not as high conviction as NBIS.
@RyanMDorsey23 This is a research note on point failure of the entire AI buildout in $AXTI/China from both substrate production and laser-grade Indium Phosphide. I’m not doing valuation analysis on individual companies But if this flow stops, $LITE, $COHR, $AVGO to $GOOGL, $MSF…
Thesis: Failure of AI buildout due to Indium Phosphide bottleneck in $AXTI/China affects companies dependent on InP supply.
@gunnaosrs Don’t think hyperscalers understand the danger yet. $COHR is the leading “virtually integrated” American company. But the risk is it’s still stuck in the bottleneck for InP feedstock and buys 6N InP polycrystal (feedstock) from the merchant market. If the companies ab…
Thesis: Coherent is a hostage to the InP feedstock monopoly, risking its laser and transceiver business if suppliers cut supply.
@VulcanMK5 Yep, $LITE and $COHR are amazing and are up quite a bit since they tons pricing power. Go few levels deeper into $AXTI (vertically integrated), Sumitomo -> Dowa, etc. the concentration risk + bottleneck flashes warning signs. With HBM, it was an investment opport…
Thesis: Photonic supply chain bottleneck similar to HBM presents investment opportunity in vertically integrated small caps AXTI and SMTOY as hyperscalers hoard materials.
Photonics supercycle driven by AI buildout and capacity sold out for years; macro distractions are irrelevant; stay long.
source ↗Laser supply constraint is a bottleneck for semiconductors, making laser companies attractive investments.
source ↗Hyperscaler orders for pluggable optical transceivers are booked through 2028, indicating strong demand for LITE, COHR, and TSEM.
source ↗Identifies winners in optical transceiver PCB bottleneck (SANM, TTMI) and argues laser chokepoints (LITE, SIVE, MTSI, COHR) are more compelling for structural re-rating.
source ↗Macro-driven crash in photonics stocks provides buying opportunity given strong fundamentals: LITE and COHR sold out until 2028, SIVE is next for CW lasers at ~$340M MC, and AXTI will become a bottleneck for substrates.
source ↗Rotation into CPO/ELS supply chains driving outperformance despite mega cap weakness.
source ↗Nvidia's recent investments in optical companies (COHR, LITE, MRVL) signal a coming supply crunch in CW/EML and CPO components, similar to last year's EML supply squeeze. Upstream laser suppliers and foundries will be the biggest beneficiaries.
source ↗Optical interconnects TAM expected to grow from ~$19B to $100B+ by 2030, driven by CPO/Scale Up with SiPh and external CW lasers; listed tickers are favorite names in the sector.
source ↗Multiple photonics/optical component companies are or will become capacity bottlenecks due to surging demand from silicon photonics and CPO. AXTI is currently a bottleneck, TSEM expected to max out in 1-2 years, SIVE upcoming with CW lasers, COHR has strengths in EML but is mixed on other areas, and SOI has a monopoly on SOI substrates required for SiPh and CPO, leading to material revenue increases.
source ↗Photonics CW laser chokepoint presents investment opportunity in high-beta exposure companies.
source ↗Found JBL interesting and purchased shares; added to existing COHR position.
source ↗COHR and MRVL are solid profitable longs with expected 50-100% gains over the next year, described as versatile but poorly understood companies.
source ↗List of 30 US stocks with brief bullish theses covering semis, AI, space, rare earths, etc.
source ↗Photonics supercycle underway with AI-driven demand surge; Lumentum's order pipeline full through 2028, benefiting the trio of American photonics companies.
source ↗$AAOI is the next $LITE with largest 1.6T capacity in America, benefiting from hyperscaler demand spillover, targeting $150.
source ↗Photonics supercycle with multiple architectural shifts. Beneficiaries include LITE, COHR for current cycle (still 50%+ upside), AAOI and JBL for transitional bridge, SIVE and POET for CPO future, AXTI for all cycles, and ALMU for future quantum dot packaging.
source ↗AI hyperscaler demand is causing widespread supply chain bottlenecks across semiconductors, materials, and infrastructure components, benefiting companies exposed to CPUs, semiconductor equipment, photoresists, grid components, optical modules, and photonics.
source ↗CPO represents the biggest supercycle seen relative to market caps, with parabolic volume ramp upon scale-up. Author willing to wait months to frontrun institutions on this architectural change.
source ↗CPO (co-packaged optics) is the #1 thematic long with TAM going from $0 to $91B. New dominant players in non-US markets (Europe: SIVE, SOI) and existing US players (LITE, COHR) stand to benefit. Legacy pluggable revenue faces cannibalization, but pure-play CPO names will surge once mass production starts.
source ↗Photonics supply chain entering supercycle with CPO as compelling theme; rotated from LITE/COHR into SIVE for greater upside.
source ↗