I put together a technical rebuttal to Citron’s AAOI short.

I can understand the valuation argument itself. The problem is that Citron went a step further and effectively framed AAOI as a commodity optical module company.

In my view, that is where the analysis becomes technically thin.

AAOI is not simply a company that buys lasers from outside suppliers. It designs and manufactures its own lasers and optical subassemblies in house. And the industry is moving in a direction where those capabilities matter more, not less.

In LPO, reducing or removing the DSP raises the quality requirements across the entire analog link. As the industry moves toward CPO, the importance of external light sources and package level optical integration only increases. Citron’s report barely addressed this technical axis, even though it is one of the most important ones.

This article is not arguing that AAOI’s stock price is automatically justified. It is an explanation of why reducing AAOI to the phrase “commodity economics” is technically weak.

Given the timeliness of the issue, I made the full article free to read.