The firm pointed to scarce laser capacity, AMD-linked hyperscaler demand and U.S. transceiver manufacturing, while warning a potentially active $600 million ATM could add volatility.
Serenity said it remains highly confident in a long position in AAOI, arguing the company is positioned around scarce laser capabilities that hyperscalers such as AMD are seeking and a U.S. transceiver supply chain for mass production of 800G and 1.6T products. The firm said AAOI's monthly revenue quote for the second half of 2027 is $471 million, which implies a $5.6 billion annualized run rate versus a $13.5 billion market capitalization. It also cautioned that the stock could see volatility from a potentially active $600 million ATM (at-the-market share sale program), short calls and broader macro factors. Separately, Serenity said a TrendForce report indicated AMD is securing CW laser supply through several major purchase orders, a sign bottlenecks may be emerging. It added that little independent Western supply-chain capacity appears to remain beyond SIVE, AAOI and possibly Macom, while Lumentum and Coherent have locked in capacity with Nvidia through multi-year deals.