The analyst is strongly long AAOI, citing scarce laser capacity, strong demand, and a fast revenue ramp with a $5.6B ARR forecast, despite bearish sentiment and volatility.
AAOI has scarce laser capacity sought by AMD and hyperscalers, industry bottlenecked by NVDA, US transceiver supply chain leadership, demand exceeding supply, $471M monthly revenue in H1 2027 implying $5.6B ARR, and major volume inflections expected in 2028.
I’m not sure why many folks are super bearish on my high conviction $AAOI long… Ever since $30, then on the way up to $170. (Yes I do think every bear is wrong, we’ll see who’s right). They have scarce laser capacity that $AMD and other hyperscalers are looking for. While the entire industry is bottlenecked by $NVDA. Along with a US transceiver supply chain for mass production of 800g/1.6T (management - largest in America). While demand far exceeds supply and while assembly gets outsourced to Asia. Then they’re quoting $471M monthly revenue in H1 entering H2 of 2027. Which is $5.6B ARR, off a $13.5B MC… While a lot of major inflection volume hits even later in 2028. As for fluctuations, there might be active $600M ATMs that get tapped into at random times. And random bear posts + macro from time to time that cause more volatility (eg. Analyst notes saying bear on $LITE due to false CPO delay rumors, then that brings down others in the sector). Also we’re a year out so timelines are still a little early. I haven’t seen such fast revenue ramp since $NBIS.
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | +2.1% | +1.3% |
| 1 week | -7.6% | -6.5% |
| 1 month | -36.7% | -37.1% |
| 3 months | — | — |
| 6 months | — | — |