- Applied Optoelectronics is a battleground stock with the shorts getting a boost by a surprise softness in Q3 guidance from the company.
- When parsing the competing narratives, we see little in the Q3 softness for the shorts to rejoice.
- More specifically, we don’t see any reason for AAOI doing much worse in 100G as it is already doing very well in 100G at the moment.
- Perhaps the best short case is for the industry to overbuild capacity for 100G and beyond. While that scenario can’t be totally excluded, so far this isn’t happening and demand in 100G is booming.
- Even then the company is likely to stand out as a cost leader.
There Is A Bear Case For Applied Optoelectronics But We Can’t See Much Of It
August 21st, 2017 · No Comments