Serenity: Recent sharp declines in silicon photonics stocks present a buying opportunity. The fundamentals of SIVE and AAOI remain unchanged, and we are optimistic about their mass production and volume expansion.

Against the backdrop of recent sharp share price pullbacks for Sivers Semiconductors (SIVE) and Applied Optoelectronics (AAOI), Serenity took a contrarian stance, saying the price drops have made it "more bullish than ever" and elaborated on investment theses for both firms. For SIVE, which has a current market cap of ~$1.9 billion, Serenity views it as a critical "bottleneck supplier" of lasers in the silicon photonics supply chain, with partners including GlobalFoundries (for reference lasers), Ayar Labs (for co-packaged optics (CPO) scaling in NVIDIA’s NVLink ecosystem), POET, and hyperscaler suppliers like Jabil. Its gross margin is around 60%. Recent bearish reports from Swedish media and a 15% share expansion stem from Nasdaq public float arrangements and merger authorization—not fundamental deterioration. The ~$140 million convertible notes are "a drop in the bucket" for U.S. institutional investors. Serenity calls SIVE’s priority Nasdaq listing the right strategy to escape local media noise. For AAOI, with a ~$10 billion market cap, the company projects monthly revenue of $471 million by H2 2027. Hyperscalers including AMD are reportedly in talks for long-term agreements (LTAs); the firm has raised ~$1.4 billion via ATM stock offerings and holds ample cash reserves. Serenity compared the current scenario to last year’s trajectory of Nebius (NBIS), which plunged from $70 before rallying to over $250 as results materialized. It noted photonics stocks are generally more volatile than other tech stocks, and the market now only awaits the two firms’ mass production ramp-up data.