Serenity, the small-cap-focused stock picker who tries to front-run the AI buildout by owning the obscure upstream suppliers of lasers and materials, spent Monday laying out an unusually detailed case that the market for a specific kind of laser is running short of supply — and that his top holding is arriving just in time to exploit it.

The laser in question is the CW (continuous-wave) laser, the light source that feeds silicon photonics and co-packaged optics, or CPO — the technology that puts an optical engine right next to a switch or GPU to move data faster while using less power. Serenity's framework treats these light sources as a "chokepoint," a critical upstream part with few substitutes that the whole optical buildout depends on.

The shortage evidence. Serenity pointed to filings and earnings commentary suggesting demand for 70mW–200mW lasers now outstrips supply. He cited Chinese transceiver maker CIG describing longer lead times and deposits needed to lock in capacity, and noted that Innolight and peers have been signing long-term agreements to secure multiple laser suppliers. He read Coherent (COHR) — a vertically integrated photonics maker spanning substrates, lasers and transceivers that he holds as a lower-beta core position — as having largely exited the merchant laser market to route its own indium-phosphide (InP) lasers internally, and possibly becoming a net buyer. Applied Optoelectronics (AAOI), the Texas-based, made-in-America transceiver maker he owns and keeps adding to, has similarly redirected laser capacity into its own transceivers and turned laser customers away. Lumentum (LITE), which he treats as the quality large-cap incumbent of the space, is still selling CW lasers but commanding a price premium, with management suggesting buyers will grab whatever supply they can find.

The names sitting on the sidelines. MACOM (MTSI), a multi-billion-dollar analog and laser supplier he uses mainly as a valuation yardstick to argue his real pick is cheap, has little CW capacity online yet but is reportedly being approached with urgency. And he flagged a TrendForce report that AMD (AMD) and hyperscale cloud operators are moving aggressively to lock down CW-laser supply — reinforcing his view of AMD as a demand engine that pulls through his upstream bets rather than a holding itself.

The payoff for his top pick. Against that backdrop, Serenity framed Sivers (SIVE) — the tiny Swedish InP CW laser maker that is his single largest position and self-described "next Lumentum" — as the supplier walking into an open door. He argued Sivers is bringing capacity online through its foundry partners, targeting 100 million-plus lasers by late 2027, and crucially offers the same 70mW/100mW/200mW power range now in shortage. He tied its attendance at the CIOE conference in Shenzhen to speculation that some of its active engagements may involve Chinese pluggable makers, and encouraged followers attending to probe whether firms like Innolight, Eoptolink and Cambridge are evaluating European laser sources.

The measured takeaway: today was thesis-reinforcement, not a new trade. Serenity is reading industry supply signals as validation that a scarce light source is exactly where he wants to be positioned.