The Tech Investor
Full-Time AI Infrastructure Investor
Nvidia is more attractive than Applied Optoelectronics, which is up 200% year to date at 136x forward earnings with insiders selling, per TipRanks. Insider selling matters more for small and mid caps than for giants. Anyone long AAOI might wait for $50 or $60 before adding, while many stocks down 30-50% offer the highest upside when their moment comes. x.com
Low PEG ratios and continuing AI demand make leading AI stocks attractive after rolling corrections. Nvidia is at 0.39x PEG, Amazon 0.64x, Broadcom 0.66x, Micron 0.73x, Oracle 0.59x and TSMC 0.41x. This usually signals at least a local bottom, possibly a major one; midterm-year seasonality helps into year-end. Nvidia, Broadcom and Amazon remain favorites; Micron and TSMC look buyable on dips. Low PEG can mislead if growth slows or estimates are wrong. x.com
Nvidia's valuation gives too little credit to its expected long-term earnings growth. Its forward P/E-to-growth ratio is 0.28, the lowest since late 2023; the bullish read depends on those growth expectations proving accurate. x.com x.com
Applied Optoelectronics' risk-reward is quite favorable because even a fraction of management's revenue goal would make the stock worth more. Management says monthly revenue in 2027 will match annual revenue in 2025; meeting that goal would put shares above $200. AAOI is a high-risk speculative stock, not a core holding or in Broadcom's league. Management is serviceable, not elite; those without high risk tolerance should avoid it. x.com
AI skepticism leaves Nvidia, Broadcom and Micron looking cheap on forward earnings. Their forward P/E ratios are 14, 18 and 5, respectively; the market may eventually stop doubting AI. x.com
Nvidia's 0.39 PEG suggests its valuation is low relative to growth. Its 26.56x P/E and 17.55x forward P/E are below their respective ten-year medians of 50.36x and 26.5x. x.com
Rising Chinese competition and doubts about valuations add to Nvidia's downside risk as the AI sector bleeds. Nvidia's break from an uptrending triangular pattern rarely ends well; the AI bubble is cracking, and the trendline break marks the beginning of something much bigger. x.com
Low forward earnings multiples across eleven stocks cannot persist indefinitely. Nvidia trades near 17.5x, its lowest in over a decade; Oracle near 15x, its lowest in six years. Uber is at 17x, Broadcom 19x, Vistra 15x, AppLovin 14.5x, TSMC 19x, Forgent Power Solutions 18x, Nokia 19.5x, American Express 17x and Western Digital 14x. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.com x.com
Nvidia looks interesting again because rising earnings estimates have not been reflected in its valuation. FY28 EPS estimates rose about 25% in 60 days while shares stayed roughly flat; it trades below 14 times FY28 earnings with a mid-single-digit free-cash-flow yield. Exponential change is hard to grasp, and it is hard to see Nvidia not winning if the US does, though there is little capital to absorb market wobbles. x.com x.com
Applied Optoelectronics should trade above $150, in part because Lumentum's CEO says its optical components are sold out through early 2029 and it cannot meet roughly 70% of demand for some products through 2027. That industry signal strengthens the case for AAOI's expanding 800G/1.6T offerings after completion of its $600M ATM, with shares around $110. x.com
Nvidia looks due for a catch-up trade, with the stock near three-year lows relative to AMD. A mid-to-high-teens P/E also seems hard to ignore. x.com
