1: Optical connectivity is the future of AI datacenters. Copper only solution does not meet 1.6T requirement
2: Growth for LITE and other players are real, not a hype. The risk is AI bubble itself, which, if true, is a risk to all tech stocks now, not just optics players
3: What AVGO said yesterday is also true. CPO itself is still in early stage and years away. Copper and Optical solutions will co-exist. So, a good news for CRDO is not necessary a bad news for LITE
4: However, LITE is way ahead of itself at 780. It was traded at 70 forward PE, 45 forward EV/EBITDA, and even if you use 2027 EPS estimate, it was still at almost 50 PE.
So, the sell off right now is nothing but MM taking advantage of "news" and knocking down the price.
I dont know where the bottom is, but I think low 500s is at least reasonable, and 400s should be an area for aggressive buy (I dont know if it can go to 400s though)
Today, the IV is to the sky and put premium is fat :)
