Five green days, 104 times earnings, and a MACOM laser still in test
Five straight green days have added about $3.8 billion to MACOM's market value, and the stock now trades at nearly three times the earnings multiple of the median S&P 500 tech stock. The product meant to carry the next leg, a 75-milliwatt CW laser, is unqualified on the company's own call and dated to a potential production start in late 2027.
Vincent Jiang · 3 min read
A $25 billion verdict on a chip shortage
Five straight green days carried MACOM to $328.30 on October 5, adding about $3.8 billion to a market value now near $25.1 billion, and still 19.9% below its 52-week high of $409.68 1. September lit the fuse: a 3.2-terabit chipset for AI interconnects, then an upgrade to Outperform from BMO's Harsh Kumar, with funds already flipped from short-biased to long-biased in August 2.
The bill comes to 104.0 times trailing earnings against a 37.4 median for S&P 500 tech, on an 18.1% operating margin below that median 1. Forward earnings cut it to 30.4 times as of September 4 3. Both numbers only work if the mid-20s growth management sketches for fiscal 2027 actually lands 5.
Trailing, MACOM trades at nearly triple the median S&P 500 tech multiple
Data
| Value | |
|---|---|
| MACOM, trailing | 104x |
| S&P 500 tech median | 37.4x |
| MACOM, forward | 30.4x |
The quarter underneath is real
Fiscal third-quarter revenue was $342.2 million, up 35.8% year over year, and GAAP net income nearly tripled to $100.7 million 4. Book-to-bill hit a record 1.6 to 1, the backlog set a record with it, and data center revenue reached $137.6 million, up roughly 40% in a single quarter 5. The pull is a shortage: customers arrive, in the CEO's words, "with urgency due to the general supply shortage of indium phosphide DFB lasers" 5.
Quarterly revenue has climbed nonstop since 2024, and the Q4 guide asks for the biggest jump yet
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| FQ4'24 | $200.71M |
| FQ1'25 | $218.12M |
| FQ2'25 | $235.89M |
| FQ3'25 | $252.08M |
| FQ4'25 | $261.17M |
| FQ1'26 | $271.61M |
| FQ2'26 | $288.96M |
| FQ3'26 | $342.24M |
| FQ4'26 (guide) (estimate) | $420M ($415–425M) |
The dates do not match the price
What the run is buying is partly a promise. The 75-milliwatt CW laser meant for silicon photonics is still in test: "we cannot declare success yet," Stephen Daly said, with a potential production start in late calendar 2027 on modest capex 5. Near-packaged optics, spread across 10 to 20 live programs, is revenue "sometime in '28" 5.
Fiscal 2026 capital spending is guided at $60 to 65 million, against $22.4 million in fiscal 2024 5. If the laser slips, the 2027 leg of this story slips with it.
The line forms upstream
The bottleneck is upstream, and everyone is paying to stand in it. AXT's indium phosphide backlog runs above $100 million with demand outstripping supply, and Lumentum put down a $43.5 million deposit, with a second $43.5 million contemplated for 2028, to reserve substrate capacity through the end of 2031 67. MACOM spent $61 million on a stake in wafer maker IQE for supply-chain resilience 5, and China's export permits for indium phosphide remain the wildcard 6.
AXT's own shares are up 425% this year on the same squeeze 6. The latest insider print is a scheduled one: MACOM's general counsel sold 653 shares at $300 on October 1 under a trading plan adopted on May 21 8.
The verdict waits on two readings
One reading is execution. Management promised a CW-laser update "in the coming quarters," and the fiscal fourth-quarter guide of $415 to 425 million demands 21 to 24% sequential growth, a steeper step than the 18.4% just delivered 534.
The other is positioning. Short interest sits at 3.57% of float and hedge-fund owners rose from 45 to 59 funds last quarter, so little money is set up to be proven wrong 3. The shortage MACOM is selling into is a shortage of calendar, not of customers.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
