Those of us with holdings in the optical networking space undoubtedly noted a spike in wealth this afternoon. It was a welcome surprise begging for an explanation. Here’s the explanation:
“NeoPhotonics (NYSE:NPTN) jumped 10.7%; Oclaro (NASDAQ:OCLR) rose 5.6%; Acacia (NASDAQ:ACIA) jumped 5.5%; and Applied Optoelectronics (NASDAQ:AAOI) rose 4.1% after a report by Rosenblatt’s Jun Zhang pointed to the tender, part of a project to build 50,000-70,000 40G/100G ports, according to the note…Huawei is likely to take 50% of the order, Zhang says – and it makes up 18% of Oclaro’s total revenue as well as 17% of Lumentum’s and 11% of Finisar’s, Bloomberg says.”
Those of us with holdings in the optical networking space undoubtedly noted a spike in wealth this afternoon. It was a welcome surprise begging for an explanation.
I’m not one of them, but congrats to those who are. I’m a tech dummy, which is a funny thing to say considering how many of my holdings could be considered “tech” companies, though I would beg to differ*. But I know pretty much nothing about networking. So my question is, is there any relation between what Arista builds and what these companies build?
Thanks,
Bear
*I don’t think SHOP is a tech company, I think they’re an online ecommerce company. I don’t think HUBS is a tech company, I think they’re an online brand awareness company. I don’t think…ok fine, Twilio is a tech company.
So my question is, is there any relation between what Arista builds and what these companies build? - Bear
Indeed, there is. What we’re talking about here is the infrastructure required for global data management. Lots o’ bits ‘n’ pieces. Infinera (INFN) transports data long distances. Applied optoelectronics (AAOI) and ACIA (ACIA) provide optical equipment (e.g. lasers) that feed the optical network. Arista builds switches/routers that send the data hither and yon. Data centers are complicated/expensive places filled with lotsa stuff… I’m investing in a piece of all that. It’s an exciting sector and it’s growing geometrically.
Disclosure: I just placed a GTC order to buy shares of Finisar (FNSR).