Michael Sikand
Investor, Autopilot Portfolio, Founder of Sikand Media
Only the highest-quality AI names belong in a 2030 portfolio now, not micro caps, low-quality names or speculative new-bottleneck plays. The picks are Lumentum, Nebius, Credo and a memory ETF, with 25% held in cash through a short-term Treasury ETF to buy from weak hands. x.comÂ
Unusual call buying in Applied Optoelectronics is starting to make sense with shares at $81.50. The New Money App reported $80,000 of $99 calls expiring November 6, 2026, and $290,000 of $340 calls expiring January 21, 2028. x.comÂ
Applied Optoelectronics' case now hinges on visible production progress. Its drop on OpenAI's revenue run-rate figures reflected an accounting question, not any change in laser or memory supply, per Carrio Research. If AAOI fails again next quarter and pushes its timelines out another quarter, it will be ugly. x.comÂ
Applied Optoelectronics' future earnings are not guaranteed, so its elevated price is highly susceptible to a drawdown that could create a far better buying opportunity by the end of next year. Capex can be cut, public and political pushback can delay data centers, and new data centers may fail to secure financing, any of which would cut projections. @RatWasteCapital counters that at $90 the stock trades at about 6x fiscal 2028 EPS if a $5.6B run rate holds. x.com x.comÂ
Ongoing demand makes Applied Optoelectronics' risk/reward make a ton of sense at current levels. The price makes little sense if management is credible even a shred; execution could falter, but that risk is, without a doubt, already priced in. x.comÂ
Strong AI demand and hyperscaler spending make the selloff a mid-cycle correction despite neocloud financing stress. Widening CCC spreads expose leveraged firms to higher borrowing costs; US competition with China supports AI buildout. The base case is a bottom in roughly 5-7 days, then stabilization and eventually a broader reversal, though some projects may fail and valuations compress. IREN, Cipher, Nebius, Applied Digital, Micron, AMD, ASML and Intel are worth gradually accumulating. x.comÂ
Optical component stocks such as Lumentum, Coherent, Applied Optoelectronics and AXT look early in an unwind, as a wave of new photonics paid newsletters signals a crowded narrative. Price pays; narratives do not. x.comÂ
Rising AI equipment demand could sustain the buildout behind Micron, Nebius, Marvell, Bloom Energy and Applied Optoelectronics. ASML says customers are raising short- and medium-term forecasts, some are interested in orders for 2029 or 2030, and its currently planned 2027-28 supply may not fully meet demand. The dip in these AI stocks might be a buying opportunity. x.comÂ
Credo is worth buying on its post-earnings dip. x.comÂ
Applied Optoelectronics' durability beyond the pluggable cycle is in doubt: instead of staying euphoric on pluggable growth, the market is already asking what comes next. It still has a low starting valuation and accelerating fundamentals, but longer-term durability is missing, and the stock failed to bounce hard after a sharp drawdown. x.comÂ
Nebius and the rest of the AI trade should be carried higher if Micron beats significantly in tomorrow's earnings, a beat the whole AI trade is banking on. There is a better than 50% chance the AI trade starts its next leg up this month; SanDisk tripled over six months after its last pullback in March. The risk/reward favors sizing in heavily, an opportunity the market offers only once in a while. x.com x.com x.comÂ