Summary:
With several optics-related stocks having already surged dramatically, investors are wondering if there are still any great plays to take advantage of.
During a recent episode of The AI Investor Podcast, co-host Eric Bleeker offered up a number of options for how investors can still find great opportunities in the marketplace (full episode below).
Bleeker made one key suggestion to those concerned they had missed out in shifting their attention toward earlier parts of the supply chain. In particular, semiconductor equipment makers that help build capacity for optical technologies may provide a better entry point. These companies stand to benefit as demand for optical components continues to expand.
Among the potential plays suggested by Bleeier is Axcelis Technologies; a recommendation that has already risen significantly since being suggested. Onto Innovation is also mentioned as a potential opportunity.
Transcript:
Where do we go in optics from here? How are we gonna play this? Because there are listeners to the show holding Momentum up 700%, Coherent (NYSE: COHR) | COHR Price Prediction up 200%, Fabrinet (NYSE: FN) up 150%, and Ciena (NYSE: CIEN) up 400%.
Applied Optoelectronics (NASDAQ: AAOI) is up 400% in a matter of months. So a lot of people are holding these or they’re saying, have I missed it? What I would say to that—we’ve done questions about this—is it is a very crowded market right now. A lot of people are crowding into this as an opportunity.
Where I will continue to focus my attention—I have a new buy today focused on this we’re about to get to—is basically going to the front of the supply chain. For this, we’re gonna need more capacity for optics. You want to buy the equipment makers making the capacity.
So we recommended Axcelis Technologies (NASDAQ: ACLS) last week. The story’s out on Axcelis. It is flying right now. Everyone realizes how well positioned it is. I think it’s up something like 40% since we bought it mere weeks ago.
The other thing you can look at is Onto Innovation (NYSE: ONTO). That one’s down 15% or so. The reason is because there’s been all these geopolitical concerns. These equipment companies are levered to the economy. They go down fast if we have a recession.
But what’s so great about Onto is I think it’s gonna have two waves. It’s gonna first move off high bandwidth memory as a trend, and right as soon as high bandwidth memory is scaling, we’re gonna see this next wave: them getting co-packaged optics business.
So if you’re someone who’s missed these optics plays and you’re looking at our scorecard and you’re saying Momentum’s up 700%, should I really buy this? Start looking at these recommendations we’re making. We’re making recommendations right now in Axcelis and Onto. We’re gonna have a new one today and start trying to get some exposure there because you’re not necessarily getting into that extremely crowded trade.
You’re getting into something that investors haven’t really started realizing is about to boom, because the revenue is just starting right now. So that would be my take on optics for anyone out there listening.
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