InP substrate demand and pricing still support the AI optics supply chain. Yunnan Germanium reports higher InP volumes from AI data centers and optical communications, plus higher prices. Q3 revenue rose 134.6% year on year, near AXT's guided 136%, but also includes germanium. IQE's H1 photonics grew 45%, partly from US defense funding. AXT's $66m Q3 guide covers only licensed exports or sales needing no license; a miss would more likely reflect licensing. x.com 

IQE is reaching its financial inflection point as InP demand for AI and data centers drives growth. It raised 2026 revenue growth guidance from 20% to over 30% after H1 revenue of £64m versus £45m, and forecasts low-teens £m adjusted EBITDA. MACOM's investment left it debt-free with £42m of cash. The 30% target looks deliberately conservative after past over-optimism; as @mkfilko notes, it implies H2 revenue below H1, which seems unlikely. x.com  x.com 

IQE is hard to call undervalued because its price already embeds a mature-margin scenario two-plus years out. At a 15% margin and 20% yearly growth, FY28 EBITDA is about GBP25 million, worth about GBP500 million at a generous 20x, versus a GBP520 million market cap at 40p. IQE earns about 3% adjusted EBITDA margins versus LandMark's high-margin epi, MACOM's convertible and warrants carry about 76 million shares of overhang, and InP supply constraints threaten its H2-weighted guide. x.com  x.com  … Show more

IQE is priced for skepticism it no longer deserves, while Sivers Semiconductors is priced for perfection it has not delivered, though both sit in the same AI optical chain. Sivers trades at about 85x sales with negative EBITDA, and Q1 revenue missed. IQE trades near 4-5x sales, is EBITDA positive, guides 20%+ growth to at least £117M in 2026, has cleared bank debt with MACOM's backing, and trades far below peer LandMark at about 70x forward. Sivers is worth revisiting only if its price resets. … Show more

Small caps such as AXT that have risen 8,800% in a year at forward P/Es in the hundreds look held by buyers hoping to dump on the next person. Investors should ask who runs them, what the moats are and whether competitors can replicate them; Nvidia's Jensen Huang says most bottlenecks can be solved within a few years, so what happens in 5-10? This pushes back on @aleabitoreddit's claim that AXT controls the materials buildout for photonics. x.com 

IQE is held above its fundamental fair value by optimistic expectations, and its takeover thesis is effectively dead. With MACOM as anchor investor holding board seats and exclusive long-term supply deals, a bidding war is practically ruled out. The 19.8p placing, a 58% discount, takes dilution since early 2025 to about 42%, and the £81 million mostly repays debt, so capex needs another raise within 18-24 months. If momentum fades the stock will fall; if it strengthens, it can keep rising. x.com 

AXT holds a critical-materials monopoly hiding in plain sight, because AI needs fiber, fiber needs lasers and lasers need indium phosphide. The stock is volatile. x.com 

Lumentum and Coherent are investments driven by product iteration, while AXT is a bottleneck trade best treated as speculation. Shortage-driven price hikes on the same parts define a cyclical stock, prices quickly discount shortage expectations, and once profits truly climb it is time to exit. Bottlenecks also push customers to design around them and invite new entrants. Investable companies keep lifting margins through yield gains and new products, driving token deflation while growing revenue. … Show more

IQE's bottleneck position in AI optics is already priced in, so the easy money is gone until its revenue and profits grow. Per @jpinsights, IQE grows the indium phosphide epiwafers high-speed lasers are built from, and validation came through MACOM's GBP45m investment, Tower's multi-year supply deal and a GBP81m raise. But the stock has rerated hard, and it is unclear whether any of this has reached IQE's own numbers. x.com 

AXT is absurdly valued at $8 billion, or 31x 2030 estimates, because the market is bidding up anything labeled a bottleneck. Such companies quickly turn from bottlenecks into over-earning commodity businesses, leaving holders with a bad bag. The guide shown from the last cycle puts quarterly revenue at just $26.9 million, and management was smart to have just raised $600 million. x.com  x.com  x.com  x.com