QF Research

🚨🚨🚨Trump on Truth Social: Israel, out of anger for what has taken place in the Middle East, has violently lashed out at a major facility known as South Pars Gas Field in Iran. A relatively small section of the whole has been hit. The United States knew nothing about this particular attack, and the country of Qatar was in no way, shape, or form, involved with it, nor did it have any idea that it was going to happen. Unfortunately, Iran did not know this, or any of the pertinent facts pertaining to the South Pars attack, and unjustifiably and unfairly attacked a portion of Qatar’s LNG Gas facility. NO MORE ATTACKS WILL BE MADE BY ISRAEL pertaining to this extremely important and valuable South Pars Field unless Iran unwisely decides to attack a very innocent, in this case, Qatar - In which instance the United States of America, with or without the help or consent of Israel, will massively blow up the entirety of the South Pars Gas Field at an amount of strength and power that Iran has never seen or witnessed before. I do not want to authorize this level of violence and destruction because of the long term implications that it will have on the future of Iran, but if Qatar’s LNG is again attacked, I will not hesitate to do so

1) Here's one oldie. $LITE beat & raised early May then preannounced + at BofA early Jun and guided Sep Q to $500M, one Q earlier than expected. LITE has multiple secular drivers, but OCS (Optical Circuit Switch) seems very underappreciated. LITE is a big net supplier of high speed datacom sources that are still in short supply, such as EMLs & CW SiPh (i.e. LITE is a true net beneficiary when CPO takes off & will gain transceiver share) as well as coherent DCI & telco products. But check out OCS, which is a ~ 300x300 (going to 500x500 or more) MEMs based optical switch. Remember MEMs? Micro-Electro-Mechanical systems that integrates mechanical and electronic components on microscopic scales.

I might be 70% there in understanding CPO scale-up opportunity through Feynman, but some technical clarifications plus coming supplier datapoints should take that to 80-90%? Inter-rack optical scale-up for NVL576, as mentioned earlier, appears confirmed for Oberon. But that's only a first step. Scale-out near term is well understood. Orders received to date by $LITE or $COHR and their high level TAM statements seem roughly consistent. Jensen is often imprecise during presentations, but that often leads to opportunities. This is one of many AI technologies where fortunes could be made or lost over the next years.

1) $NVDA financial team clarified those details yesterday evening to analysts. Jensen misspoke as mentioned here. If one took his statement literally, he said at least $500B next 5 quarters, but $500B is cumulative BW & Rubin over ~ 2 years thru end of C26 or ~ F27. His GTC slide is still fine and not inconsistent. For example, this is MS comment this morning after feedback from Colette's team. My back of envelope last night is roughly inline. It's not the 60% higher forward guide, but still well above consensus "so far" and doesn't including China, where Trump said "we'll be speaking about Blackwells" with Xi last night. Overall quite positive developments. NVDA also reiterated $1T sales/year, which it implied early this year, is still on track perhaps this decade. Other clarifications include BW & Rubin dies (Rubin is now NVL144) and inclusive of networking, which I would've assumed but wasn't 100% sure initially. All this is why "we really need Colette to be sure."

Several asked me why $HIMX was down today. One of the tech roadmap nuances I referenced was TFC or TFC Communications 300394, which is mentioned as a CPO partner during Jensen's GTC presentation. TFC supplies passive fiber array units and is $NVDA's initial supplier. Possible involvement of TFC has been mentioned in Asian supply chain. FOCI & HIMX likely participates later next year. It's still unclear to me whether scale-out and/or scale-up.