Joe
Full-Time Trader/Investor, Semiconductor & AI Infrastructure Inflection Points
MaxLinear's optical data center business has hit an inflection point, and the stock could reach $70-80 this year. Q1 EPS of 22 cents beat the 18-cent consensus and revenue of $137.2M topped estimates, up 43% year over year as infrastructure grew over 130% to become its largest market. The CEO called Q1 the start of a multi-year growth phase, with a step-function revenue increase expected in Q2 from optical ramps at multiple hyperscale customers. x.com x.comÂ
MaxLinear is one of only three makers of DSPs for pluggable transceivers, alongside Marvell and Broadcom, and demand outstrips supply. Applied Optoelectronics' massive capacity expansion directly signals DSP demand at 1.6T and beyond. At a $2.35B market cap it flies under the radar; its CEO left plenty of room for upside revisions on the Q4 call, and the stock could easily reach all-time highs around $80 later this year. x.com x.comÂ
MaxLinear's post-earnings reaction looks like an overreaction to solid growth. Q2 revenue rose 55% to $168.8M, infrastructure grew 145%, and adjusted operating margin expanded to 22.3% from 15.9%. Q3 guidance of $210-220M implies another ~27% sequential jump, 2026 optical data-center revenue guidance was raised again to $190-210M from $150-170M, and 1.6T products are in customer qualification. x.comÂ
MaxLinear's AI optics ramp is now confirmed in its results and guidance. Q2 revenue rose 55% to $168.8M, beating estimates, operating margin jumped to 22.3% from 7.2%, and infrastructure grew 145% on optical AI data-center adoption. Q3 guidance of $210-220M implies 27% sequential growth. Keystone is ramping for 800G optics at hyperscale data centers, with 1.6T next, and a $19.7M inventory build suggests orders are already visible. x.comÂ
MaxLinear has strong operating leverage as its 800G optical data center ramp runs far faster than expected. Q3 revenue is guided up about 27% sequentially with flat OpEx, lifting operating margin near 28% on the way to 30%+. Weak cash flow reflects prepaying for 5nm wafers to meet a six-month backlog. FY26 optical guidance rose to $210-230M entirely from 800G, and 1.6T Rushmore, retimers and storage accelerators ramp in 2027-2028 with massive upside. The sell-off looks way overdone. x.com x.comÂ
Repeat orders and larger new-customer orders are driving SmartOptics' growth. Q3 revenue rose 80% and EBIT 340%, with strong cash flow. Ciena and Nokia are busy serving hyperscalers; SmartOptics should scoop up all other smaller customers. Its 300M revenue target by 2030 suggests more growth. x.comÂ
MaxLinear still looks cheap relative to its expected EPS growth over the next 12-18 months. Fundamentals are very impressive, with revenue growth accelerating year over year and margins expanding. x.comÂ
Optical transceiver demand exceeds supply, and 1.6T lifts revenue per module for suppliers able to qualify capacity. Applied Optoelectronics raised at least $1.62B through 2026 ATMs; its last reported monthly capacity was 200,000 modules versus a year-end target above 650,000. Credo expects over $600M in FY2027 revenue across optical DSPs, PICs and modules, not modules alone. Shipments, yields and margins must prove out. Lumentum and Coherent already price in much expected growth. x.comÂ
MaxLinear is being repriced as a scale-up play: it is one of only three companies, with Marvell and Broadcom, making DSPs for 1.6T optical interconnects, yet is worth about $2B against their $50B+. Its Keystone DSP ships to multiple hyperscalers at 400G and 800G, and its Annapurna platform adds 1.6T AEC and 3.2T retimers for scale-up. Infrastructure revenue grew 130%, revenue is projected at $630M by 2028 from about $200M, and Applied Optoelectronics' 800G and 1.6T ramp needs DSPs. x.comÂ
Credo's 45% drop from its high was about customer concentration and valuation, not demand, making it a great long-term buy. The latest quarter beat on revenue and guidance: revenue grew 115% to $479M, a seventh straight quarter of triple-digit growth, and management guided to more than 85% growth for the fiscal year. Optical revenue is targeted to pass $600M this year, on top of the AEC business five hyperscalers already buy. x.comÂ
Rising 1.6T switching demand favors optical suppliers, though their execution risks vary. Bank of America says the market could grow ~101% annually through 2030. Marvell's leading DSPs and Lumentum's supply-short 200G EML lasers are lowest risk; Applied Optoelectronics' capacity expansion and Fabrinet's customer concentration make them medium risk. Aeluma remains pre-commercial, while Lightwave Logic's polymer modulators are a high-risk moonshot despite its TSM partnership. x.comÂ
Credo's growth rides surging AI interconnect demand, and management expects revenue to grow more than 85% in FY27. F1Q27 revenue rose 115% to $479 million, EPS of $1.20 slightly beat, and F2Q27 guidance is $525-535 million. Active electrical cables remain the near-term engine as adoption broadens across hyperscalers and neoclouds; FY27 optical revenue is still expected above $600 million, though a higher optical mix dilutes gross margin. The $227 target rests on 20x FY28 EPS of $11.40. x.comÂ
