Core Thesis - MACOM Technology Solutions Holdings, Inc. (MTSI) is positioned as a key enabler of next-generation optical connectivity through its leadership in Linear Drive Pluggable Optics (LPO), which challenges traditional DSP-based optical solutions [2][3] Technology and Market Position - MTSI's core thesis is based on the premise that DSP chips are not always necessary for high-performance optical links, allowing the company to amplify signals without them, leading to lower costs and reduced power consumption [3] - LPO serves as an intermediate solution between conventional pluggable optics and the long-term vision of co-packaged optics (CPO), enhancing efficiency for hyperscalers and data center operators as AI-driven data center traffic increases [4] Financial Performance - MTSI is projected to achieve a revenue growth of 15.9% in FY26, with EBITDA expected to expand at a faster rate of 32.0%, reflecting operating leverage and a higher-margin product mix [5] - The company currently has strong net income margins at 27.2%, indicating the profitability of its differentiated technology [5] Investment Case - The investment case relies on MTSI's ability to scale LPO adoption as a credible alternative to DSP-heavy optics, capturing market share as customers prioritize power efficiency and cost [6] - If LPO gains broader acceptance, MTSI's growth and margin trajectory could justify its premium valuation, while execution missteps or slower adoption could pose risks due to elevated multiples [6]