Johan Ekroth
AI Infrastructure/Space/Defense Investor, Bottleneck Research
Smartoptics' Q1 one-time cost signals management sees structural demand. The $0.5M charge was not a relocation from Oslo but a capacity expansion in Kista, Stockholm, where it has operated for years: 4,100 sqm of lab, warehouse and training space on a seven-year lease. Management signed it in July 2025, before Q1's 59.6% revenue growth, and you do not commit to seven years of extra capacity unless you believe demand is structural. x.comÂ
Smartoptics is still priced as a niche Oslo-listed telecom vendor while its customers shift toward the AI buyers behind Ciena's premium valuation. Q1 2026 revenue rose 59.6% to a record $22.9M in a seasonally weak quarter, gross margin expanded to 48.2% despite Chinese pricing pressure, and the Americas grew 77.8%. Management cited orders from AI-focused neo-scalers. Its open, disaggregated optical networking breaks vendor lock-in, which matters more as AI forces faster, cheaper scaling. 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
Smartoptics has moved from story stock to execution machine, with Q1 2026 revenue growth accelerating to 59.6%, or $22.9M, from 35% in 2025. Americas sales grew 77.8% as US Tier 2 and 3 providers leave Cisco and Nokia lock-in, and its 400G and 800ZR products are gaining neo-scaler AI clusters. EBITDA margin was 11.7%, or 13.7% excluding production relocation costs, which should fade and push margins toward the 2030 target of 16% faster than expected. Short-term profit-taking de-risks entry. … Show more
Smartoptics is an underfollowed optics play that could double in the next month or two based on peer comparisons. Sales likely reach $300M by 2028, and while most peers trade at 5-10x 2028 sales, Smartoptics trades at 1.5x. It is already profitable, has a strong balance sheet and is growing very fast. x.comÂ
Networking is the next AI hardware trade after memory, whose share of rack value rose from 15% to 35%. Optics is moving inside the server, as Nvidia's Feynman architecture builds in co-packaged optics and silicon photonics. Scale-across networking could grow 30% a year just linking existing data centers, as inference moves closer to users and training spreads across sites. Supply is tight: Lumentum's CEO said it can meet only 30% of expected 2027 demand and sees optics tighter than memory. x.comÂ
Boring middle-power suppliers like SmartOptics could do really well over the next three years because hyperscalers have locked up supply chains several levels down, so second- and third-tier vendors serving the non-AI economy benefit disproportionately. With Ciena and others sold out, ISPs rely on SmartOptics to connect data centers and cities. x.comÂ
Optical suppliers face demand beyond capacity, strengthening the sector's case for the coming months. Lumentum's CEO says it is effectively sold out through early 2029; Ciena says lead times limit growth, and Coherent cites constraints across nearly every product line. Applied Optoelectronics doubled its share count to expand capacity and meet demand. Soitec raised guidance twice this year; Marvell raised guidance and its 2030 TAM, while Broadcom sees 4x EPS by 2030 on visible demand. x.comÂ
Applied Optoelectronics guided Q3 revenue sharply higher to $255M-$290M with non-GAAP net income of $10.1M-$24.0M, showing growth turning into profit. It is expanding its Pearland, Texas, campus for 800G and 1.6T modules, and management expects orders to outstrip capacity through mid-2027. Its US-based, diversified manufacturing positions it for shifts away from Chinese optical modules, and as 800G shipments more than doubled in Q2, non-GAAP gross margin reached 29.8%. x.comÂ
Demand for Applied Optoelectronics' transceivers is settled, so it is now a manufacturing story where execution is the only variable. Management says demand runs 20-40% above supply and informally guided about $330M of 800G/1.6T revenue in Q4, implying $480-500M total, about double Q3's guide. It expects to be the fourth qualified 1.6T supplier at a major hyperscaler with a >$200M order, and capacity rises to 650,000 units by end-2026. A Chinese transceiver ban would favor its US-made supply. … Show more
Applied Optoelectronics is undervalued at about 2x 2027 revenue, and if management executes and hits guidance, the stock will do more than double. The market treated its nearly 400,000 sq ft manufacturing expansion in Pearland, Texas, to scale 800G and 1.6T transceiver production, as bad news, ignoring the company and the broader market structure. x.com x.comÂ
Coherent's pivot to AI optics is paying off as copper gives way to optical links inside large AI clusters. Quarterly revenue topped $2 billion for the first time, up 42%, with datacenter and communications up 59% to 79% of sales. Multi-year contracts with AI leaders including Nvidia extend order visibility into 2028. It launched its PhotonLink interconnect platform at ECOC 2026, and its indium phosphide, VCSEL and 6-inch wafer strengths give it a moat in 800G and 1.6T transceivers. x.comÂ
