SPVNF - Spectra7: A Speculative Microcap Pick And Shovel AI Play
2024-02-23 20:06:08 ET
Summary
- Spectra7 forecasts a 60% CAGR in the next several years driven by data center sales.
- The company aims for 65% gross margins.
- Spectra7 is the first to market with Active Copper Cable (ACC), a new technology with potential for significant growth.
- AI factories can use up to 3X the number of cables, which is their primary target market.
- Spectra7 is expecting an inflection point in 2024.
Background:
Spectra7 ( SPVNF ) is a micro-cap company traded on the OTCQB under the symbol SPVNF and on the TSX, Toronto Stock Exchange under the symbol SEV. They are based in San Jose, CA.
Spectra7 is a fabless semiconductor company specializing in silicon chips embedded in the connectors of standard copper cables. These chips amplify and condition data transmission signals. By improving the signal, data can be reliably transmitted using longer and thinner copper cables. These cables, called Active Copper Cables or ACC for short, present a value proposition for data centers, VR headsets, and the automotive industry. AI factories use up to three times the number of cables than in a typical data center. AI centers are a target market for Spectra7.
What Spectra7 does (Spectra7 website)
Investment thesis:
Spectra7 is in the enviable position of being first to market with ACC, and currently, they have few direct competitors. They have 55 patents that provide a level of protection for their solutions. ACC’s sweet spot is for systems that require 800Gbits/second interconnects with distances over 1 meter and under 7 meters. Historically, passive copper cables were used for short distances and optical cables for longer interconnections. Spectra7’s technology extends the range of passive copper cables and is significantly less expensive than an optical cable solution....
Spectra7: A Speculative Microcap, Pick And Shovel, AI Play