Aurelian 🦑

$MU Q2’26 EARNINGS HIGHLIGHTS 🔹 Adj. Revenue: $23.86B (Est. $19.74B) 🟢; +196% YoY 🔹 Adj. EPS: $12.20 (Est. $8.9) 🟢; +682% YoY 🔹 Adj. Gross Margin: 74.9% (Est. 69.1%) 🟢 🔹 Adj. Operating Margin: 69.0% (Est. 62.2%) 🟢 🔹 Operating Cash Flow: $11.90B (Est. $8.93B) 🟢 Q3 Guide: 🔹 Adj. EPS: $19.15 ± $0.40 (Est. $11.7) 🟢 🔹 Adj. Revenue: $33.5B (Est. $22.5B) 🟢 ± $750M 🔹 Adj. Gross Margin: ~81% 🔹 Adj. Operating Expenses: ~$1.40B Segment Performance: 🔹 Cloud Memory Revenue: $7.75B 🔹 Core Data Center Revenue: $5.69B 🔹 Mobile and Client Revenue: $7.71B 🔹 Automotive and Embedded Revenue: $2.71B Other Metrics: 🔹 CapEx: $5.0B 🔹 Adj. Free Cash Flow: $6.9B Financials: 🔹 Adj. Operating Income: $16.46B 🔹 Adj. Operating Expenses: $1.42B (Est. $1.41B) 🔴 🔹 Adj. Net Income: $14.02B 🔹 Cash, Marketable Investments & Restricted Cash: $16.7B Capital Return: 🔹 Dividend: $0.15/share 🔹 Quarterly Dividend Increase: +30% Commentary: 🔸 “Micron set new records across revenue, gross margin, EPS, and free cash flow in fiscal Q2, driven by a strong demand environment, tight industry supply, and our strong execution, and we expect significant records again in fiscal Q3.” 🔸 “In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand.” 🔸 “Reflecting confidence in the sustained strength of our business, our board has approved a 30% increase in our quarterly dividend.”

$SIVE is the upstream laser supplier for CPO and Silicon Photonics. They're the likely $COHR / $LITE type future light source for: - $AMZN Trainium Clusters - $MSFT Maia Clusters and possibly other hyperscalers like $META MTAI and $GOOGL TPU clusters. At a ~$200M MC. Relational Mapping (speculative): $SIVE (light source) -> $POET (optical interposers) -> $MRVL (Likely Celestial Captive) -> $MSFT Maia + $AMZN Trainium. $SIVE (light source) -> Ayar -> AiChip -> $AMZN Inferentia/Trainium $SIVE (light source) -> Enablence -> O-Net -> ? Asia Hyperscalers _ Ongoing: $SIVE (light source) -> Ayar -> GUC -> ? (Google $TPU) $SIVE (light source) -> Ayar (TeraPHY/SuperNova)-> Wiwynn (captive CPO) -> ? ( $MSFT, $META historically Wiwynn's largest clients). Because of captive models like $MRVL Celestial, they get a free ride. However, they do compete multi-source ELS against Lumentum, Coherent, and $MTSI with Ayar and win anyway in merchant models. But they win either way. For high-volume production ramp up, a large part of it depends on the ongoing Win semi qualification, but this will likely be a large indicator. Again supply chain BOM is extremely confidential. $AMZN will never tell anyone "Hey, we use $SIVE ". But if you put 1+1+1+1+1 together, you can piece together the likely suppliers. Most people see "Poet Starlight" uses $SIVE. Or Ayar uses $SIVE. But don't map all the multi-hop relations to see where they end up. I do think $SIVE is an extremely undiscovered opportunity as the next possible mini $LITE for Silicon Photonics at $200m MC. As they're the likely upstream laser supplier for hyperscaler supply chains for future CPO/Silicon Photonics scale up with cw dfb lasers and scale out with laser arrays.

I've been the first few to cover many supply chain photonic names. Most are up 100-400%+ since I've posted. Here's the TLDR overview of my thesis posts: “Safest” Longs as of Today: - $TSEM (Tower Semi) - $SOI (Soitec) - $COHR - Defensible compounders over time. Soitec - Substrate monopoly over silicon photonics / CPO architectural ramp at dirt cheap valuation (after recent 40%+ rise maybe still 1.4x book) Tower Semi - P/E in the 10's for 2028, 70%+ capacity booked already, $NVDA architectural partner, and basically the pure play $TSM of photonics. Coherent - Basically does everything from materials/substrates to lasers to transceivers in photonics. As well as fundamental supplier to many other verticals. Most High Beta/Extreme Growth Longs: $AXTI - InP duopoly with Sumitomo (that getting export controlled), upstream feedstock duopoly with Vital. Basically at the top of the entire photonics food chain is AXT. There's certainty export control risks, but my thesis is that if AXT goes down, the photonic buildout with AI goes down. So might as well go long on AXT. $AAOI - 10x revenue ramp into 2027. Laser -> Design -> Assembly, Made in America. Main uncertainty is execution, scaling laser capacity that they've bought from $COHR, etc. Demand from hyperscalers are all there. Can they deliver? I'd take the risk. $IQE - Basically completely dependent on restructuring and clearing debt (~$200M MC). Known $LITE supplier for epiwafers, and their main competitor was Landmark with a $3.5B+ valuation. The latent capacity is there with reactors, but they basically need to pull off a successful pivot over to photonics and cut off legacy drag for 10x rerating. Highest risk out there, but maybe worth the reward.s Long $GOOGL TPU Ecosystem: $LITE - Basically very high BOM related to optical due to OCS monopoly for Google. If you think Google TPU is a trillion dollar program that might end up like $NVDA, go long on $LITE. Google has $175-180B capex planned for 2026, and their CTO for AI Infra said they plan to up that Y/Y, probably spending $1 trillion in the next 8 years. If that holds up, $LITE is extremely undervalued relative to forward potential. Of course the supply lasers to other hyperscalers too, but I'd say it's more heavily tethered to Google growth. _ There's a ton of others out there I've covered like: $POET - I'm personally not long, but $400M balance sheet gives it good cushion. Just found Celestial from $MRVL ramp was too far out, eg. $500 million 2028, $1 billion 2029 projections, for revenue to be too material as of 2026. It largely depends if their interposers get other hyperscaler qualifications rather than backdooring through Marvell, which was the main bull case. $HIMX- I did find this thesis to be slightly compelling as a likely $TSM COUPE supplier. But personally, I preferred $SOI, and would just put more concentration into that (since Soitec known supplier already to basically everything silicon photonics, and is just coming out of a downturn). There’s a lot more like $NOK, $SHMN, that are interesting, but I’ve personally out concentration into the ones I find most compelling. As “crowded names” like $LITE, it does not mean there’s no upside left. It just happens to be more priced in until there’s new news. There's a lot of "critical suppliers" but there's a difference between importance in the supply chain... And converting that into extreme revenue growth eg. $AAOI -> $4.5 billion in revenue. But for TLDR photonics exposure, my portfolio looks similar to this: High Concentration (Safer) $TSEM foundry, $SOI substrate, $COHR everything Mix of Long + CSP (High Volaility): $AXTI substrate/feedstock, $IQE epiwafer, $AAOI transceiver supply chain Then Long Google with $LITE

There is so much more to the Photonics trade📓 $LITE $CIEN $GLW $AXTI $AAOI On this page I have predominately covered just a couple layers to this trade Mainly lasers, optical components, and transceiver/modules But there is so much else to this trade, and so many other layers where there is significant upside if you dig deep enough Materials Foundry / wafer fabrication Packaging / advanced integration Electronics around the optics Fiber / passive infra Qualification / test / reliability Architecture / system design So many layers. So many companies. So much opportunity!

If you missed the AI trade don’t sleep on photonics.. AI clusters are getting so large that moving data between GPUs is becoming the real bottleneck. That’s driving explosive demand for optical networking across the stack: $LITE $COHR $AAOI (lasers/optical components), $TSEM (SiPho), $MRVL $AVGO (interconnect chips) and many others.. The next phase of AI may be less about compute… and more about connectivity.

$147.27 per barrel (ATH) reached in July 2008. Take a wild guess what happened after this?

Black swan events come with their own set of disruptions. TSMC is not getting helium right now. Singapore port is having logistics issues with delayed cargo. Crude stuck in Hormuz is causing a storage glut. The world is going through a manufactured supply chain disruption.