Serenity: Still Bullish on Storage Sector, Market Focus Shifts Back to Photonics

BlockBeats News, August 9th, Serenity expressed its bullish view on the storage sector, with Micron (MU) and Samsung as representatives, believing that the market tends to rotate between different supply bottlenecks. This week, targets in the photonics sector, from AXTI to LITE, once again became the focus; compared to the decline in July, the main change was the stock price, followed by scattered narratives and business updates.

He pointed out that during the July drop, the market already knew that COHR and LITE's laser products were sold out for the next 2 years and learned about demand imbalance from AAOI's last quarter earnings call. Apart from the stock price changes after the liquidation, the fundamentals of the photonics sector have not deteriorated; the bottlenecks in optical transceivers and indium phosphide substrates have not changed and may even intensify.

On the storage side, Serenity mentioned that retail investors are showing signs of surrender, but the same group of people previously held an extremely bullish view after MU signed 16 SCAs and provided excellent forecasts. He believes that the current storage business's operating profit-to-market cap ratio is "extremely unreasonable," and next year's demand imbalance may be even more severe; what the same company has changed is only the valuation and narrative, while the market rotates between different sectors.