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Monday, October 26, 2026

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Merger Monday & Election Implications

EQT’s $50 billion merger with Range Resources and Ovintiv’s $1.26 billion acquisition of Logan Energy reshape North American oil and gas alongside Brazil and British Columbia election…

EQT $34BRRC $13B
Bison Insights 7 clicks

From X

@aleabitoreddit

Serenity on X

I can't give advice on what others should do but from what I'm seeing from $AAOI revenue ramp, it looks something like this from disclosed capacity. -> $858M Q1 2027 -> $1.29B Q2 2027 -> $1.62B Q3 2027 -> $1.89B Q4 2027 -> $2.14B Q1 2028 They're sitting on $6.8B MC right now. I'd be very impressed if they do $7.5B exit annualized revenue run rate in 2027 off 40% gross margins and markets assigned them the same valuation. And judging from $LITE making capacity agreements into 2030-2031... I don't quite think demand stalls out after 2027-2028. Anyway, lot of execution risk obviously, but H1 2027 inflection point is pretty close, so I'm personally waiting.
@aleabitoreddit 3 clicks

Serenity on X

$LITE CEO interview on demand, counterparty + financing risk: - "CFO of $GOOGL came on and reported capex going up Y/Y, we expect hyperscalers for report an increase in capex in earnings. Based on what we see, we see their spend going up." - "The purchase agreements we have, to a large degree, are noncancellable." - The difference between Lumentum and companies like $AVGO, "we are not as dependent on AI datacenter buildout going forward" There's a conversion between electrical products to optical products" creating structural demand. Q: When do you see able to see yourself having more inventory? (catching up to surge in demand) - When we look at demand, there is "no end in sight" TLDR: Financing risk and demand aren't equally distributed across AI supply chains. But markets are just selling everything off together. As for photonics in specific, I said this before, but increasing optical content per XPU + CPO/NPO adoption keeps going up so we'll likely see sector spend go up, even if aggregate capex goes down. There's the usual "no end to demand in sight" commentary, but $LITE does have capacity commitments into 2029 now... and are negotiating for 2030. (with new information that most of which are likely hyperscalers + non-cancellable) So doesn't quite sound like it's all over for the AI trade, especially photonics.

Investor Letters

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Molina & Kinsale

Molina Healthcare and Kinsale Capital’s earnings are reassessed through a long-term lens, emphasizing conviction and detachment during…

MOH $11BKNSL $8.1B
Bearstone 8 clicks

“Our Strategy Is Unchanged”

Netflix’s $51 billion FY26 revenue outlook and global streaming scale underpin its core strategy as management addresses slowing…

NFLX $511B
TSOH Investment Research 7 clicks
WRBY · long

Warby Parker

Warby Parker's $25 valuation does not capture potential upside from smartglasses alongside its core omnichannel eyewear business.

WRBY $3.1B
Value Investors Club 3 clicks

Tower Semiconductor Deep Dive

Tower Semiconductor’s low-loss photonics chips halve lasers in 1.6T optical modules, supporting a $680 million annualized photonics run…

TSEM $19B
CV's Substack 10 clicks

Deep Dive: $ASML

ASML’s €230 million EUV machines underpin advanced AI chip production, with demand booked through 2028 after nearly $9 billion and two…

ASML $631B
Rebound Capital 8 clicks

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