The Waiting Game

• AI infrastructure • Tech frontiers • High-conviction investing

Not financial advice.

[The Waiting Game @TheWaitingGameX]

$AAOI is now close to a 50% drawdown from its ATH in... May. It is, of course, a sector-wide issue, as other players like $SIVE have been hit as well. However, as usual, this sell-off might be disconnected from the actual business momentum.

The demand for high-speed optical transceivers (especially 400G and 800G architectures) is booming, positioning $AAOI perfectly to capture this multi-year growth cycle.

As we can see in the attached chart, 1.2/1.6T high-speed interface modules will be growing at an enormous pace, reaching almost half of the total TAM by 2030.

Their strategic partnership with Microsoft remains a massive revenue catalyst. Being a key supplier for a hyper-scaler provides them with a stable backlog that smaller competitors cannot match.

What is even more interesting, the margins are bound to improve as the product mix shifts towards higher-generation optics.

At these levels, the R/R is getting tempting.

NFA/DYOR

Chart source: Omdia research via Applied Optoelectronics IR.

[The Waiting Game @TheWaitingGameX]

@GingerNinjaZA Macro is still choppy, hopefully after the midterms we'll see a rally.

[The Waiting Game @TheWaitingGameX]

I think this might be the last opportunity to grab some $IREN shares in the 30s.

FinX negative sentiment is usually the best bottom indicator.

Will you seize the opportunity or pass on it?

[The Waiting Game @TheWaitingGameX]

@wh1tewalker1 Yeah, macro can drag it down, last time it was ~$28. A lot of high-beta stocks have just dropped.

[The Waiting Game @TheWaitingGameX]

@RMBFinance Yes, understood, the ATM was a huge bearish and rational point. I really hope the financing structure will be better from now on.

[The Waiting Game @TheWaitingGameX]

@RMBFinance What makes you think it's overvalued? I reckon that it's probably near support levels and heavily derisked. Agree that it has been tough time for $IREN shareholders.

[The Waiting Game @TheWaitingGameX]

@chicfryrice It's always choppy before the midterms, followed by a rally afterwards. Worth to mention that July broke some rules...

[The Waiting Game @TheWaitingGameX]

@CKCapitalxx PainPal is back to its usual behavior...

[The Waiting Game @TheWaitingGameX]

@LeonsMBO Yes, ~1.5B mcap, so much potential. The entire power sector is lagging, once the tides will turn, $TE will swiftly rebound.

[The Waiting Game @TheWaitingGameX]

@babyfolio I guess it's NDA, someone mentioned that it might be IPO related, but I wouldn't go that far.

[The Waiting Game @TheWaitingGameX]

@wallstengine Pump time?

[The Waiting Game @TheWaitingGameX]

@retard3dinvst0r I wasn't aware that Spider-Man is so profitable.

[The Waiting Game @TheWaitingGameX]

@AdityaInvests90 Typical in this market, but the reaction during normal trading hours matters more.

[The Waiting Game @TheWaitingGameX]

@InvestJourneyX These levels ($70) should be the floor for the price. Turned out to be a quite different scenario, but I believe it will get there soon.

[The Waiting Game @TheWaitingGameX]

@JonkooTrades Got rid of $40 curse - dropped to $38, lol.

Expected initial reaction, but to be frank, we might see these levels for the last time. The deal was a nice surprise but other things were reiterated as well (execution, targets etc.).

[The Waiting Game @TheWaitingGameX]

@smoove5241 Yep, agree about RSU compensation packages, but anyway it starts to look better regarding the execution (Horizon), I think 2027 will be crucial for $IREN.

[The Waiting Game @TheWaitingGameX]

$IREN FY26 Print is a major turning point!

• Top-line beat: Small revenue beat vs expectations. EPS missed as expected due to ~$450M non-cash impairments from decommissioning legacy BTC mining hardware.
• Cleaner financing structure: Customer pre-payments now cover 45-55% of GPU Capex. Dilution risks are rapidly diminishing.
• ARR trajectory: >$4B ARR target confirmed, with $1B already operational.
• Validation: Horizon 1 delivery was a massive derisking event. Execution is being proven in real-time.

The most critical catalyst - the new deal with a frontier AI lab.

The primary bear arguments - dilution & execution are officially evaporating as the transition to a pure-play AI Cloud leader accelerates.

Significantly derisked at these levels. More to come.

[The Waiting Game @TheWaitingGameX]

@smoove5241 Are you satisfied with it? Seems better than expected at the moment, in my opinion.

[The Waiting Game @TheWaitingGameX]

@jpinsights True, the dilution story is hopefully in the past. I hope they will also address the ATM utilization. But pre-payments with revenue inflows in 2027 make me optimistic as well.

[The Waiting Game @TheWaitingGameX]

@wh1tewalker1 Initial reaction almost flat, waiting for the call. I expected a drop at first, to be honest. It's usually like that.

[The Waiting Game @TheWaitingGameX]

Just a reminder what to watch during the $IREN's earnings call. Any raise of the ARR target would be a pleasant surprise!

What are your expectations? FinX sentiment feels really low.

[The Waiting Game @TheWaitingGameX]

Forget backward-looking EPS. $IREN earnings next week aren't about the past, they're about the AI cloud rerating.

In my opinion, EPS and revenue will not be crucial here, although seeing some AI revenue uplift would always be a plus.

What will matter more?

🔹 $4B+ ARR target confirmation
🔹Horizons 2-4 timeline, delays are the main risk
🔹Capacity milestones: 480MW in 2026 and 1.2GW in 2027
🔹Mirantis integration process
🔹ATM utilization progress

Simply put, guidance and execution are key. Rerating can happen as the market will see better topline structure, with a higher share of AI revenue.

Delivering Horizon 1 (50/200 MW) to Microsoft already killed the execution bear thesis.

Important note: $IREN is reporting a day after $NVDA. Volatility will be extreme.

What's your price target post-earnings?