PhotonBull
Equity Researcher, Co-Runner of Retail Club
Gooch & Housego is a great defense long that is not expensively valued on future technology, with thin-film lithium niobate as an extra lottery ticket. @MoodyWriter13 notes major co-packaged optics deployments use silicon photonics, making TFLN a likely 2028+ supplement at 1.6T or 3.2T; Gooch & Housego's chance to be a player there is small and uncertain. x.com
Gooch & Housego offers nearly free exposure to the thin film lithium niobate ramp for co-packaged optics, on top of a profitable defense and aerospace business that provides a floor. TFLN enables fast, low-power 1.6T and 3.2T AI interconnects, and supply is very tight and dominated by a Chinese maker. Raytheon, under a US Air Force Research Laboratory contract, chose G&H to build a domestic TFLN wafer supply. At about $250M market cap and 1.3x EV/sales, that is not priced in. x.com x.com
Gooch & Housego's H1 2026 trading update supports the thesis: a record £167.3M order book, up 16.5%, signals accelerating demand for photonics and laser systems. Revenue reached £81.9M with 9.1% organic growth, led by aerospace and defense, and management confirmed the semiconductor recovery is underway. Net debt rose to £37M from £29.9M on deliberate inventory and capex to meet the backlog. Trading is in line, but the order book suggests the breakout is just beginning. x.com
United Microelectronics, Jabil and NGK Insulators are better bought back after a historic bear market expected next year than held now, despite a strengthening HyperLight thin-film lithium niobate thesis. Telecom validation widens the market: Ciena is qualifying TFLN as a second source in its shipping WaveLogic 6 Extreme platform, Cisco holds patents bonding lithium niobate onto silicon photonics, and Nokia has worked with HyperLight since 2018. They could be had at half price at the lows. x.com … Show more
Gooch & Housego is not currently an AI photonics investment, because thin-film lithium niobate plays no role in co-packaged optics today. All major CPO deployments use silicon photonics; TFLN only becomes relevant as a supplement at 1.6T or 3.2T, likely a 2028+ play, and whether G&H will be competitive remains to be seen. That pushes back on @PhotonBull's case for G&H as the best TFLN pick. It is a solid company with strong defense tailwinds, and AI relevance may come in late 2027 or 2028. x.com … Show more
Silicon photonics and co-packaged optics are clearly what's next, and the market is rewarding accelerating revenue growth. Some timelines may slip and a 20% pullback is possible, but holding legitimate parts of the value chain for three years should push these stocks to laughable valuations. x.com
Interconnect, not compute, is now the binding constraint on AI clusters. Copper, pluggable optics and CPO will coexist for years, so the strongest names span both paths or own the tightest bottleneck. Top five: Credo, the fastest-growing full stack; Applied Optoelectronics, the 800G/1.6T ramp; Marvell, broadest but richly priced; Lumentum, the laser chokepoint; Tower, the foundry bet. Coherent, Amphenol, Fabrinet, GlobalFoundries, TSMC and Broadcom also gain. Astera Labs is pricier and narrower. … Show more
The LYTE ETF offers pure-play exposure to global photonics and optics leaders, with Coherent and Lumentum as its top holdings. Nvidia CEO Jensen Huang has said the world needs substantially more silicon photonics capacity than it has today, explaining Nvidia's $4B investment in Lumentum and Coherent. x.com x.com
Lumentum and Coherent sit at the center of a multiplicative optical bottleneck, where parts, capacity, yield and customer sign-off each limit output. Next-gen AI clusters need optical interconnect, and McKinsey sees 800G transceiver output 40-60% short of demand through 2027 as the market doubles to $26B in 2026. Nvidia invested $2B each in both to lock in laser supply, and the FCC is drafting curbs on Chinese transceiver imports; Chinese suppliers hold ~60% of optical-component revenue. x.com … Show more
Coherent has the most substance in the optical group and the only real base on its chart, while the sector's sell-off is macro, not fundamental. At about 23x 2027 estimates it looks mispriced, and it is the only company holding 6-inch InP, silicon photonics, OCS and CPO engines at once. It alone has stopped making lows. Rate-hike pricing and a 5.04% 10-year are still compressing optical multiples, so staged, defined-risk entries beat full commitments; a daily close below 264 invalidates it. … Show more
Corning is low conviction because being a one-of-one supplier critical to photonics does not guarantee it benefits as much as others in the supply chain. Corning should do well long term, but other, higher-conviction stocks offer better exposure to the photonics era. x.com
Astera Labs' valuation has gotten nuts given its medium- and long-term competitive and technology risks, especially next to NVIDIA and Broadcom. The aixPhotonics acquisition was smart, but even if those optical offerings ramp well, they are unlikely to offset the long-term cannibalization of retimers, AECs and similar products by NPO and CPO. x.com
