The distinction between technical importance and economic capture is the key. Optics can become a bigger bottleneck without every supplier getting pricing power. I’d watch which shows up first: program wins, margin expansion or customer concentration.
Optics is one of those picks-and-shovels corners of the AI buildout that gets less airtime than the chips. The part I'd want to pressure test is how much of the current order book is durable versus a one-off capex wave, because that's usually where these names get repriced. How are you thinking about the cyclicality risk here?
The distinction between technical importance and economic capture is the key. Optics can become a bigger bottleneck without every supplier getting pricing power. I’d watch which shows up first: program wins, margin expansion or customer concentration.
The optics boom is only the surface signal; the lasting opportunity is owning the power stack that keeps those photons moving.
https://paretoinvestor.substack.com/p/nuclear-is-the-new-oil
Optics is one of those picks-and-shovels corners of the AI buildout that gets less airtime than the chips. The part I'd want to pressure test is how much of the current order book is durable versus a one-off capex wave, because that's usually where these names get repriced. How are you thinking about the cyclicality risk here?
Own the optics. The AI buildout still has to buy them.
https://paretoinvestor.substack.com/p/ai-buildout-semiconductor-investing-guide