MACOM Ships 3.2-Terabit Optical Chipset as Stock Doubles

MACOM Technology Solutions has given investors two numbers to weigh: its stock has more than doubled over the past year, and its newest optical components push data rates toward another doubling.

On September 17, MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) announced a 3.2-terabit optical chipset built around eight 448-Gbps PAM-4 channels. A day later, BMO Capital upgraded the shares to Outperform with a $335 price target. The bank's case rested on valuation: a 36% decline from the May peak had compressed MACOM's forward multiple to roughly 29 times earnings, while data-center fundamentals remained intact.

The move puts Coherent Corp. (NYSE:COHR) directly in the conversation. Both companies supply the optical connectivity that keeps 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 components are already available, rather than sitting on a research roadmap.

The opportunity for MACOM is content growth. As links move toward 3.2T, higher-speed optical modules require more sophisticated analog and photonic components. A single supplier that can provide both transmit and receive building blocks can also reduce customer qualification work.

The catch is price. Even after the pullback BMO highlighted, MACOM has already been rerated around AI networking. Continued upside requires the new products to convert technical leadership into revenue faster than rivals.

Coherent brings much greater scale in data-center optics and has become one of the market's better-known beneficiaries of AI networking demand. Scale can help Coherent capture broad volume as 800G, 1.6T and eventually faster links proliferate. It also makes the company more exposed if hyperscaler deployments or optical pricing soften.

Hedge Funds Moved in Opposite Directions

Insider Monkey's Q2 data showed MACOM ownership rising to 59 hedge funds from 45 in Q1. Whale Rock Capital held about 989,000 shares after reducing its stake 16%. Coherent ownership fell to 105 funds from 114, although D. E. Shaw increased its position more than thirteenfold to roughly 1.64 million shares.

Short interest remains modest. About 2.96 million MACOM shares were sold short at the August 31 settlement date, equal to roughly 3.9% of float with 2.4 days to cover.

The optical market does not need one winner. AI clusters require so much bandwidth that several suppliers can grow simultaneously. What MACOM's new chipset changes is the comparison. A stock 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 paying attention.