If even $MSTR and Saylor are thinking about finally caving, then the wider DAT ecosystem is cooked. If Saylor starts dumping, it will be a race to the bottom.

It is also telling that MSTR is down 6% despite this announcement. I think the market perceives Saylor to own too much of the supply to call it quits now. If he dumps even 1 BTC, everyone else starts dumping—and he can bid farewell to his dream of exiting his remaining 649,000 BTC. Damned if I do, damned if I don’t situation

Sputnik moment

Added more longs:
SNDK @ $194
$LITE @ $293
$CRDO @ $180

Dip buys on $SNDK/$LITE doing really well! Think these 2 areas will continue to be in short supply/high demand on a longer timeframe and at a larger scale than the market currently thinks — so more than happy to deploy ammo on dips.

Sold $MU @ $235 to add to $SNDK long @ $214 to $215

Made $SNDK third largest position in the book

Added more $LITE long @ $336 and $CIEN @ $199

$LITE is my second largest position

Taking some time to share about my conviction in making $LITE my second-largest position, and in maintaining a heavy exposure to the photonics ecosystem. Pls do yr own DD

Spent the past two days down the optics rabbit hole, and the problem that it solves is fascinating. Side note: did you know that different colors of light travel at different speeds through fiber?

The thesis is simple: next-gen AI models are currently limited by the bandwidth and latency ceilings of the switches and cables connecting GPUs—perhaps even more than by the raw compute power of the GPUs themselves. Today’s infrastructure relies heavily on copper cables and electrical switches, which are: 1) power-hungry, 2) heat-intensive, and 3) limited in reach.

In fact, the reason you can only fit ~72 GPUs into a single rack (like the NVL72) is largely due to the physical limits of copper; electrical signals degrade too much if they travel any further.

Given the potential market share gains from replacing copper-heavy infrastructure, there is plenty of growth ahead for optical solutions.

Scale-out is the immediate oppy; scale-up is the mid-term oppy but which remains the 'holy grail' given the sheer volume of copper currently inside each rack. Scale-across will be the long-term driver.

Regarding $LITE, they are the dominant manufacturer of EML chips and a first-mover in next-gen optical tech like CPO (Co-Packaged Optics) and OCS (Optical Circuit Switching). To me (and my untrained eye), these look like the defining technologies of the next decade.

Producing these high-power, high-reliability laser chips is incredibly difficult; hence, these chips are the defensive moat of an optical transceiver. Lumentum and Coherent effectively operate as a duopoly, holding ~90% of the EML market. $LITE also holds a dominant share of the External Laser Source (ELS) market, which is a binary requirement for CPO— you simply cannot execute CPO without an external laser source.

I view CPO as existential for scaling GPU density and bandwidth. Reliability is a massive moat here. Customers are reluctant to design $LITE out because their products are battle-tested, stemming from decades of experience producing lasers for subsea cables — basically the harshest environment imaginable.

A mentor once told me: 'You can be contrarian on direction, but you can also be contrarian on magnitude.' I believe the adoption of optics will be far larger than what the market perceives today; it is the key to unlocking future model advancement.

Hence, this will be the incentive for hyperscalers, NVIDIA, and Broadcom to underwrite the risk to shift away from the copper-dominated links of today. And If you look at NVDA/AVGO pushing CPO and Google’s use of OCS, signs of that adoption are already here.

https://x.com/trendforce/status/1998060191946875298?s=46

Also added $AXTI long @ $12.11 to the optical basket

Pure-play producer of InP substrates (key ingredient for EML chips) to LITE. In very short supply now as EML chips are pretty much sold out till 2027 -- see link above.

Low cap play so inherently risky. A key risk here is that the company is susceptible to China’s export controls as it produces its raw materials through Chinese subsidiaries (Indium, Gallium, Germanium). AXTI has secured some export licenses for Indium for now, but we can never know if/when this will change.

Cut $CRDO long @ $178 for -1%

Just slipped short on it @ $165.94. Given the rich multiples and the inevitability of copper -> optics, r/r for short makes sense to me.

Added $TSEM long @ $121.72 to optical basket — currently includes:

$LITE $CIEN $COHR $TSEM $AXTI

Added a small long of $AMKR @ $46.54, think it will continue to benefit from packaging demand overflow. Bit late on this though I think

Rebuilt my short positions over the course of the week — unplanned but mostly at better prices than when I closed it all.

Largest size below, smallest above. Avg price = cost basis, last price = current price.

$ORCL commentary dragging down the AI capex plays today.

$ALAB taught me that when a fundamental cornerstone of your long thesis changes, you should not only exit your longs, but also flip short.

That lesson came in handy with the $CRDO flip from long to short this week, with rumours of NVDA bringing forward their CPO adoption timeline.

So much of investing is making mistakes and learning from them — and that’s precisely what makes it so fun and dynamic.

https://x.com/arronwei3n/status/1998570417624322397?s=46