The analyst expresses a bullish stance on photonics-related stocks like AAOI, SIVE, COHR, LITE, and NVDA, recommending dollar-cost averaging at current levels despite recent volatility, expecting a potential parabolic run after hyperscalers report earnings in late July.
Smaller market cap photonics stocks like AAOI and SIVE are highly volatile but offer compelling risk-reward with relatively undiscovered alpha; larger diversified names like COHR and LITE with NVDA backing are more stable; the dip is expected to continue but DCA'ing is advised for those who believe in these names.
Completely expected results from my poll the other day: Where 82% of people were down over the week (I was too). Gonna guess that most were heavily invested in places like photonics that seemed to take the biggest hit. Names like $AAOI and $SIVE are super high volatility especially at smaller market caps. Compared to slightly larger, more diversified names like $COHR and $LITE with $NVDA backing. Generally, the further upstream you go in the supply chain, the more uncertain & the higher the volatilies become. But ofc, that's where the more compelling R:R lies w/ relatively undiscovered alpha (institutionally speaking). Interesting times though. No idea when the dip stops dipping, but if you believe in these names (like I do), then ofc DCA'ing at these levels is probs your best bet instead of when they go on their next parabolic run. Which'll maybe be around the time hyperscalers report earnings at end of July: - $GOOGL 22 Jul - $MSFT 29 Jul - $AMZN 30 Jul
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | +0.0% | +0.0% |
| 1 week | +0.3% | -1.1% |
| 1 month | +0.8% | +1.0% |
| 3 months | — | — |
| 6 months | — | — |