Serenity (@aleabitoreddit) Reposts a Citi Line: Lasers and Optical Fiber Are Being Treated as the Next HBM

I went through the latest quarterly reports of the four laser companies Serenity mentions most, and revenue is surging at all four, but one company's books made me pause.

2026-10-26 · 2 min read

For the quarter ended June 27, revenue was $1.01B, up 109.3% year over year and up 24.5% quarter over quarter. GAAP gross margin was 47.4%. Next-quarter guidance is $1.225B to $1.275B. In the press release, the CEO said demand is rising for the ultra-high-power lasers used in CPO (co-packaged optics). Optical links are becoming the main way data centers connect.

For the quarter ended June 30, revenue was $2.05B, up 34% year over year. Data center and communications revenue was $1.615B, compared with $1.018B a year ago. That is an increase of about 59%, calculated from the two periods. GAAP gross margin was 38.5%. Next-quarter guidance is $2.2B to $2.4B.

For the quarter ended June 30, revenue was $191.9M, compared with $103.0M a year ago. 800G product revenue more than doubled quarter over quarter. The company said demand will keep exceeding capacity until mid-2027.

This is the one that stopped me. GAAP gross margin was 27.7%, lower than 30.3% a year ago. The quarter also had a net loss of $22.8M. The money for expansion is coming from share sales. The third ATM (at-the-market) offering this year sold out on October 5. It sold 5,694,845 shares at an average price of $105.36, for net proceeds of $588.0M. Serenity has also criticized this kind of repeated share issuance.

For the quarter ended June 30, revenue was $47.6M, up 164% from $18.0M a year ago. Indium phosphide revenue was $30.7M, the highest in company history. GAAP gross margin was 44.9%, and net income was $11.1M. On the earnings call, the CFO said that in Q2 the company signed long-term supply agreements with Casella and Coherent. The two customers prepaid $22.3M and $25.4M, respectively.

Customers paying first and waiting for product is the kind of setup I like most.

Revenue at all four is doubling or close to it, but the ways they make money are very different. $LITE has a 47.4% gross margin. $AXTI is taking customer prepayments. $AAOI has a 27.7% gross margin and is still issuing stock.

Whether lasers can become the next HBM depends, in my view, on whether gross margins can keep climbing the way Micron's did. Right now, $LITE and $AXTI are on that path.

The next quarterly reports from these companies are due around November. I will check the numbers again then.

To check it yourself, you only need 3 steps:
1. Open sec.gov and search for the company name.
2. Find the Exhibit 99.1 press release in the latest 8-K.
3. Press Ctrl+F and search for gross margin, then go to the 10-Q and search for prepayment.

The numbers come from company 8-Ks, press releases, and earnings calls. This is not a stock call. Whether to buy is up to you.