why i think optic fibers still have more room to run: dd

around 3 months ago, i made a post explaining why i thought photonics and light related companies have so much room to run, despite the fact that they have already ran 300%+ at that point. Since then, these companies (i.e. lite and aaoi) have ran up even more. generally, i feel like these stocks are under-discussed (per say) on reddit. despite their ridiculous run, i still think they have more room to go, and heres why:

first and foremost, i talked a bit ab the actual tech behind this industry and why its important on my post a few months ago, feel free to check it out. but basically – this tech revolutionizes how gpus talk with each other and is much more efficient than the traditional copper wires most solutions currently operate on.

but back to the big idea on why i think it will continue to go up. the most important bit to realize here is that despite parabolic stock prices, the demand for their tech is still very high. i think we have seen when hyperscalers increase capex (like goog amzn msft meta are all doing rn) to build computing power, rising, smaller, more niche industries (particularly those that bring new tech like aaoi and lite) start increasing dramatically. thus, demand for these optic fiber solutions are still very much present. with companies such as lite and aaoi the only ones big enough to support a big buildout to match demand, they basically control the industry.

more importantly tho, is the fact that comparatively, this industry is still in the very early phase. the industry is still trying to figure out who the big sharks that will eventually win are (ill let you in on a secret its prolly gna be either lite and aaoi). when compared to earlier run-ups such as the hardware run up (memory and semis) we saw earlier, we can draw parallels. a prime exemplar is mu (micron tech for memory). it was very clear by early 2025 that memory was to become a very big bottleneck. in a year, the stock price of mu approximately 5x. however, the memory bottleneck did not get solved, it was still very clearly present. what changed was at this point it became very clear that mu was one of the few companies that had the tech and capabilities to scale out to meet demand and thus make a ton of profit. and because of that, the stock market rewarded them once again, giving mu another 2x in profit. another clear example of this would be nvda (our golden boy). when ai first launched in 2023, and it became ultra clear that AI would need a lot of GPUS and need them FAST, their stock price quadrupled in about a year. Similarly, the demand for GPUs would not decrease. It also became clear at that point that NVDA would monopolize the industry and be an industry leader – and the stock price tripled again in a year. it is also worth noting that in both MU and NVDA's cases, this whole process of rocketing stock prices before slowing down to meet a more fair valuation would take at least 2 years (i personally believe MU also has much potential to go up). when examining LITE, yes the stock underwent more dramatic increases, but it has only been a year since the real run up. in other words, whether analyzing through time or phases of stock prices, lite still has more room to run.

but many smart folks have pointed in my last post that copper is not dead – companies such as credo have their own revolutionary copper wires that do a very good job of saving energy. but this point can be addressed through understanding the fundamental differences of copper and optic fibers. optic fibers are used over longer distances (e.g. between racks that are further apart) and copper is used in closer distances (e.g. when the 2 gpus are right next to each other). copper can do an excellent job in shorter distances, but not longer distances. for further proof, credo themselves recently purchased a fiber optic company to try to dip their feet in this new and advancing industry.

obviously the reasoning i used here may be a little far fetched for some (after all its basically a casino). but just tryna share my thoughts. i do think earnings next week (which i am personally guessing will be good based on historical patterns of companies working in a bottlenecked industry) will be a good gauge to the current status of the industry. moreover, i understand that everyones a genius in a bull market, so dont take my opinion too seriously or too to heart. also for whatever reason wsb keeps preventing me from posting who knows how to fix that.