Traders buy MACOM as a China-ban winner; its own 10-K shows China paid 37.7% of revenue

MACOM, a Lowell, Massachusetts maker of analog, microwave and optical semiconductors traded on Nasdaq as MTSI, filed its fiscal 2026 annual report↗ on November 12 ¹. Coverage led with the swing: revenue up 37.3% to $1,327.6 million, net income of $335.3 million against a $54.2 million loss a year earlier, gross margin up 330 basis points to 58.0% ².

The same document carries a number no outlet put in a headline. Customers billed in China paid 37.7% of fiscal 2026 revenue, up from 28.4% ¹. In dollars, China paid $501.0 million, within $5 million of the entire United States at $505.8 million, and up 82% in a single year ¹.

The optical ramp is real

Data Center revenue rose 74.0% to $509.7 million on optical components, including photodetectors for data-center links running at up to 1.6 terabits per second ². Industrial and Defense, still the largest market at $536.4 million, grew 27.8%, and Telecom added 10.6% to $281.6 million ². Quarterly revenue has climbed for ten straight quarters, closing the year at $424.8 million, up 62.7% ³. On November 5, chief executive Stephen Daly guided the new quarter to between $450 million and $460 million and set a base case, expressly not formal guidance, of roughly 80% data-center growth for fiscal 2027 ⁴.

A ban-winner trade meets its own filing

The bull case on social platforms is blunt: "you have no hyperformance AI data center without the lightening fast photonic opticals, and US is trying to ban China suppliers," one Stocktwits trader wrote↗, tagging MTSI ⁵. The policy behind it is live.

The Federal Communications Commission is drafting a ban on imports of Chinese optical transceivers, the modules that move data over fiber inside AI data centers, and Reuters reported on November 10↗ that Microsoft▼−0.28% — Microsoft, down 0.28 percent today has been pressing the White House to drop it, warning a ban could stall the AI buildout ⁶.

MTSI jumped 10.3% to $249.86 on November 11 ⁷, and a stock purchase by Representative Gil Cisneros, who sits on the House Armed Services Committee, circulated on X the same week↗ ⁸.

The same ban cuts both ways

Traders are buying MACOM▼−5.57% — MACOM, down 5.57 percent today as a bet against China; in fiscal 2026 China nearly matched the whole United States as its customer ¹. The filing argues with the trade on both ends. A ban that steers hyperscalers toward domestic suppliers would feed MACOM's data-center line, but the 10-K warns that changes in US or Chinese trade, tariff or export-control policy could hurt sales into China, and that Beijing is funding domestic semiconductor supply chains that could displace foreign vendors ¹.

China has also imposed or proposed export controls on gallium and indium, the feedstocks of MACOM's compound-semiconductor wafers ¹. Policy news already moves these names: Lumentum▼−6.65% — Lumentum, down 6.65 percent today and Applied Optoelectronics, the two stocks most tightly tied to the ban thesis, fell about 4% on November 12 as Microsoft's pushback surfaced, though a broader AI selloff was also at work ⁹.

Insiders sold the whole way up

GuruFocus↗ counts $287.5 million of insider selling over the past twelve months, with no buying ⁷. Of the $335.3 million profit, $61.0 million is an investment fair-value gain rather than operations; operating income was $305.5 million, up 136% ¹⁰¹¹. At $249.86 the stock sits 15.1% above GuruFocus's value estimate of $217.13, and still about 40% below its 52-week high of $418.90 ⁷.

The caveat, and the date that decides it

One limit the filing itself forces: revenue is counted by customer billing address, so no one outside MACOM knows how much of that China line is contract manufacturers feeding the same US AI buildout rather than Chinese end demand ¹. The counterweight to the bear case is real too. The draft ban reportedly covers only new Chinese transceiver models↗, exempts installed gear and has no vote date, and the 3.2-terabit threshold under discussion would leave today's 1.6T products untouched ⁶⁹. The tell is the FCC's published rule: its threshold, or its absence, decides whether China is MACOM's tailwind or its exposure.