The analyst expresses a personal bullish thesis on photonics stocks like AXTI, SOI, and AAOI, expecting a major inflection point in 2027-2028 despite recent drawdowns and volatility.
Belief in an ongoing photonics supercycle with expected corrections; recent losses due to concentration and float/dilution concerns; expects scaling up in 2027-2028; advises building own conviction.
Think so. But in the meantime, I call my strategy: Diversified Losses. With $AXTI, $SOI, $AAOI, and many others. Had a massive drawdown recently, CPO exposure was hit the hardest (Foci, Msscorp, etc) and adjacent names, feels bad. Probably lesson personally, I had too much concentration in photonics vs. memory/other sectors without weighting/hedging properly. With Soitec, there's been a few negative institutional reports that I'd disagree with. Think AXT was hit harder in specific just because of float expansion/dilution concerns. AAOI, probably just brought down with the theme. I can't give advice on buying, so completely up to you to make for cost averaging or entering positions. But I do think we're still early in the Supercycle with photonics, there's bound to be corrections/crashes along the way up. If my personal thesis is correct though, many of these names will have a major inflection point in midway through 2027 scaling up to 2028. Markets don't typically wait to price things in advance, but some ideas might be a tad early or in the buildout given it's H2 2026 now. Which is why it's important to build your own conviction.
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | +1.6% | +2.3% |
| 1 week | -18.0% | -19.4% |
| 1 month | -30.7% | -31.3% |
| 3 months | — | — |
| 6 months | — | — |