The analyst is bullish on the optical sector stocks like SIVEF and COHR, expecting a scale-up opportunity in 2027 and notes institutions are waiting for better entry points.
Short sellers are likely to close positions soon and plan to buy optical stocks in 2027 due to scale-up CPO opportunity; recent weakness is seen as temporary.
Rosenblatt on recent optical sector weakness from $AAOI to $LITE: "Stocks in the Optical sector have traded poorly for the last 1-2 months" due to CPO delay reports and China capacity scares. "We think short sellers... do not actually strongly believe in the thesis." Multiple short sellers told them they will likely close their positions... late July and early August. Further, they say they plan to buy Optical stocks in 2027 for the scale up CPO opportunity. Hilarious report on laser weakness, read is very positive for $SIVEF, $COHR, and others moving forward. I've been long on CPO sector, but seems like institutions want entry points, just a bit later on.
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | -5.3% | -4.5% |
| 1 week | -14.5% | -12.9% |
| 1 month | — | — |
| 3 months | — | — |
| 6 months | — | — |