MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is drawing fresh investor attention for two reasons at once: its shares have more than doubled over the past year, and its latest optical components are pushing data-transfer speeds toward another step up.
On September 17, the company unveiled a 3.2-terabit optical chipset built around eight 448-Gbps PAM-4 channels. A day later, BMO Capital upgraded the stock to Outperform and set a $335 price target, arguing that a 36% drop from the May peak had brought MACOM’s forward valuation down to roughly 29 times earnings while data-center fundamentals remained intact.
That also puts Coherent Corp. (NYSE:COHR) in focus, as both companies supply the optical connectivity needed to keep larger AI clusters fed with data.
Faster GPUs need faster networks
MACOM’s new platform combines drivers, photodiodes and transimpedance amplifiers for next-generation optical modules. The company says the parts are already commercially available rather than being limited to a research roadmap.
The opportunity for MACOM lies in content growth as links move toward 3.2T. Higher-speed optical modules require more sophisticated analog and photonic components, and a supplier that can offer both transmit and receive building blocks may also reduce customer qualification work.
Even so, valuation remains a key issue. Despite the pullback highlighted by BMO Capital, MACOM has already been rerated around the AI-networking theme. Further upside will depend on whether the new products can turn technical leadership into revenue faster than rival offerings.
Coherent Corp. (NYSE:COHR), for its part, operates at a much larger scale in data-center optics and is already seen as one of the better-known beneficiaries of AI-networking demand. That scale could help it capture broader volumes as 800G, 1.6T and eventually faster links spread across the market. At the same time, it leaves the company more exposed if hyperscaler deployment plans soften or optical pricing weakens.
Hedge funds moved in different directions
Insider Monkey’s second-quarter data showed hedge-fund ownership of MACOM rising to 59 funds from 45 in the first quarter. Whale Rock Capital held about 989,000 shares after trimming its stake by 16%.
Coherent moved the other way: ownership fell to 105 funds from 114, although D. E. Shaw increased its position more than thirteenfold to roughly 1.64 million shares.
As of the August 31 settlement date, about 2.96 million MACOM shares were sold short, equal to roughly 3.9% of float, with 2.4 days to cover.
The broader takeaway is that the optical market may not need a single winner. AI clusters require so much bandwidth that several suppliers could expand at the same time. What MACOM’s new chipset changes is the comparison point: a company that spent years outside the center of the AI trade is now shipping components aimed directly at the next generation of links, and Wall Street has started to take closer notice.
