The 100G Rollout is Real and You Need to GET IN HERE

There are two major themes in tech that you need to be paying attention to now. The first being the adoption of OLED technology, which will replace LED/LCD and the upgrade cycle at data-centers from 40g to 100g. You could do a cursory google search to understand what this means, engineering wise and why it’s so important. I’m just here to give you some trading ideas. I do not provide this information selflessly, but expect YOU FUCKING RETARDS to do some due diligence, report back to me, in order to vet out the best ideas.

Let’s establish a few facts. Web services is quickly becoming the domain of Amazon’s AWS. Agreed?

If AWS is undergoing a major upgrade cycle, those who supply services to Amazon stand to benefit. Agreed?

Good.

Just like with my OLED thesis, there are ancillary plays, like COHR, that will reward shareholders will immense gains, even more than the actual producers of the product.

The same could be said about the AWS upgrade cycle.

I mentioned some ideas in Exodus today. Here is what I’ve come up with so far. Bear in mind, this sector is about to catch fire again, after today’s announcement that Amazon was reducing pricing for AWS.

AAOI, GIMO, AXTI, NPTN, ACIA, MTSI, OCLR, ANET, LITE, IPHI, FNSR.

Today’s gains in AAOI were a long time coming, ever since the stock collapsed after last quarter’s earning disappointment.

The risk with owning AAOI is customer concentration. Because Amazon is such a big customer of theirs, they’re exposed to the possibility that Amazon will pressure them on margins and/or choose a different supplier. To hedge this risk, providing you wanted to play this sector, buy a basket of stocks and quit trying to get rich off one name.

The other major narrative in tech is semiconductor processing power — led by stocks like LRCX and NVDA. We see to be in a perfect case scenario where companies are innovating, yet not cutting each other’s throats over pricing. This cannot last forever. Eventually, they’ll try to grab share again by reducing prices, eroding margins and share prices.

For now, especially in the OLED rollout, we are in the early innings and there is a lot more room for upside.

Disclosure: Long OLED.

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