Enjoying this content?
Get three under-the-radar investment themes delivered to your inbox every Monday.
PCB manufacturers are riding AI infrastructure and 5G buildout
Theme 1: PCB Manufacturing Boom Driven by AI Infrastructure and 5G Buildout
The printed circuit board industry is experiencing a fundamental shift in demand patterns. On the supply side, manufacturers are investing heavily in HDI (High Density Interconnect) and microvia board capabilities to meet the technical requirements of AI servers and 5G equipment. Regional reshoring initiatives in the United States and Europe are creating new manufacturing capacity closer to end customers, reducing supply chain risks while potentially improving margins.
On the demand side, three major sectors are driving growth simultaneously. AI infrastructure requires increasingly dense HDI boards for high-performance computing applications, with this segment growing at 6.8% CAGR through 2030. The telecommunications sector leads with 29.42% market share as 5G networks expand globally, requiring sophisticated PCBs for base stations and fiber-optic equipment. Automotive applications represent the fastest-growing segment at 7.21% CAGR, driven by electric vehicle adoption and autonomous driving systems that require multiple high-performance circuit boards per vehicle.
Stocks that would benefit:
FLEX: Flex Ltd - A global manufacturing services leader that has strategically pivoted its PCB manufacturing capabilities toward high-margin AI data center infrastructure, with data center revenue surging 50% year-over-year to $4.8 billion in fiscal 2025 (25% of total revenue). Flex's unique "Grid to Chip" positioning as the only provider offering end-to-end cloud IT integration combined with power and cooling solutions makes it ideally positioned to capture the telecommunications sector's 29.42% market share of PCB demand driven by 5G infrastructure expansion. Read More →
SANM: Sanmina Corporation - Positioned at the intersection of AI infrastructure and telecommunications with its specialized high-complexity PCB manufacturing capabilities. The company's recent $1.6 billion ZT Systems acquisition immediately establishes Sanmina as a top-tier AI data center infrastructure provider, with management targeting a $5.7 billion annual run rate. Sanmina's Components, Products and Services segment delivers 14.6% gross margins, significantly higher than industry averages, allowing it to capitalize on both the 5G buildout and the rapidly growing automotive PCB segment. Read More →
CTS: CTS Corporation - Has successfully transformed from a transportation-dependent supplier to a diversified industrial technology company with a growing focus on high-performance PCBs for communications infrastructure and automotive applications. The company's strategic diversification is delivering results with industrial (+21%), medical (+22%), and aerospace & defense (+23%) markets all posting strong growth in Q3 2025, positioning CTS to benefit from both the telecommunications-driven PCB demand and the automotive segment's industry-leading 7.21% CAGR as vehicles require increasingly sophisticated electronic systems. Read More →
Theme 2: LiDAR Sensor Adoption Accelerates with Nvidia Partnership and Production Scaling
The LiDAR industry is experiencing a critical inflection point as regulatory approval and technological maturity converge. On the supply side, companies like Hesai are achieving significant scale with over 1 million units shipped in 2025, becoming the first globally to reach this milestone. Production capacity is expanding rapidly to meet growing demand, with improved manufacturing processes driving down costs while maintaining higher margins than traditional automotive sensors.
On the demand side, China's conditional approval for Level 3 autonomous vehicle production in September 2025 has opened a substantial market opportunity. L3 vehicles require 3 to 6 LiDAR units per vehicle, creating system values of $500 to $1,000 per vehicle compared to single-sensor configurations. Major Chinese EV manufacturers including BYD, Li Auto, and Xiaomi have announced new design wins, while Nvidia's platform adoption validates the technology for global automotive manufacturers. Additionally, robotics applications are emerging as a high-margin growth driver with volumes expected to double in 2026.
Stocks that would benefit:
HSAI: Hesai Group - The undisputed market leader in LiDAR production volume, having shipped over 1 million units in 2025 and now doubling annual production capacity from 2 million to over 4 million units in 2026. Hesai's dominant 40% market share in the ADAS LiDAR segment with its mass-market ATX sensor at $200 positions it perfectly to capitalize on China's L3 autonomous vehicle approval, which requires multiple LiDAR units per vehicle. The company's strong relationships with Chinese EV manufacturers like BYD, Li Auto, and Xiaomi have resulted in numerous design wins, while its rapidly growing robotics LiDAR segment (growing 1,300% annually) provides higher ASPs and margins than automotive applications. Read More →
OUST: Ouster Inc - Uniquely positioned in the LiDAR market with its four-vertical strategy (industrial, robotics, smart infrastructure, automotive) that reduces dependence on the slower-moving consumer ADAS market. The company's software-attached revenue model is transforming its business, with software-attached bookings growing over 60% in 2024 and each BlueCity deployment carrying a 100% software attach rate. This creates recurring revenue streams that have expanded gross margins beyond the 35-40% target range to 42% in Q3 2025. Ouster's smart infrastructure expansion to 700+ sites positions it to capture significant market share as L3 autonomous vehicles require sophisticated infrastructure support. Read More →
Theme 3: Oil Tanker Shipping Benefits from Fleet Constraints and Geopolitical Tensions
The tanker shipping market is benefiting from a unique combination of constrained supply and robust demand. On the supply side, U.S. sanctions on Russian oil infrastructure, including Rosneft and Lukoil, are effectively removing vessels from the global fleet as enforcement intensifies. Each sanctioned vessel reduces available capacity, directly supporting higher freight rates. Despite record tanker deliveries expected in 2026, fleet utilization rates are projected to reach 92%, the highest in seven years, indicating extremely tight market conditions.
On the demand side, OPEC+ production increases from 2025 continue generating strong export volumes, particularly from Middle East producers. These increased crude flows require significantly more tanker capacity for longer-haul routes as traditional Russian supply chains are disrupted. The combination of geopolitical tensions forcing longer shipping routes and reduced available fleet capacity creates a favorable environment for sustained elevated freight rates throughout 2026.
Stocks that would benefit:
TNK: Teekay Tankers Ltd - Operates a modern, fuel-efficient fleet of mid-size tankers (Suezmax and Aframax vessels) that are strategically positioned to benefit from the structural supply collapse in the crude tanker market. With 25% of VLCCs and nearly half of Suezmax/Aframax vessels either sanctioned or over 20 years old, Teekay's young fleet is capturing premium rates in a supply-constrained environment. The company's ultra-low free cash flow breakeven of approximately $11,300 per day provides significant downside protection while enabling extraordinary operating leverage—for every $5,000 increase in spot rates above breakeven, annual free cash flow increases by $1.66 per share, directly benefiting from the geopolitical disruptions forcing longer shipping routes. Read More →
STNG: Scorpio Tankers Inc - The largest publicly-traded product tanker company has undergone a profound financial transformation, reducing net debt by $2.5 billion since late 2021 to just $438 million, achieving robust liquidity of approximately $1.4 billion and a low cash breakeven of $12,500 per day. This financial strength positions Scorpio to capitalize on the product tanker market's structural tailwinds, including refinery rationalization and increasing ton-mile demand due to longer transportation routes as global oil trade patterns shift due to sanctions and geopolitical constraints. The company's modern, efficient fleet is perfectly aligned with the market's need for compliant vessels as sanctions enforcement intensifies against Russian oil infrastructure. Read More →
Join our Discord community to give feedback, request features, or ask questions about the newsletter or website.
https://discord.gg/yePwyWrwJBThe content is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk. Past performance is not indicative of future results. Investments may lose value and are not guaranteed.
Loading more newsletters...
