According to BlockBeats, on August 14th, a report released by Bank of America's Chief Investment Strategist Michael Hartnett and his team indicated that the 2026 midterm elections could be a key watershed moment for the US AI stock market. If the Republicans retain the Senate and Texas Governor Greg Abbott is re-elected, the market may interpret this as a signal of continued AI capital spending and data center expansion, potentially leading to further strength in US stocks, especially the AI sector, and possibly a "bubble" rally in 2027. Conversely, if the Democrats win both the Senate and the Texas governorship, AI investments and risk assets will face repricing, with US stocks potentially experiencing a sharp decline of over 10%, and the dollar and bond yields also falling accordingly. Bank of America defines the Texas gubernatorial election as a referendum on "cost of living and AI data centers"—Texas currently has 335 data centers, with another 247 planned.

The current bullish sentiment is still supported by fundamentals: S&P 500 earnings growth reached 32% in the second quarter, AI capital expenditure is expected to exceed $1 trillion by 2027, the US stock market has risen by about 14% this year, and AI industry chain markets such as South Korea have seen even higher gains. However, market optimism is already highly crowded, Bank of America's "Bull and Bear Indicator" is still in the sell signal zone, private clients' equity allocation has risen to a record high of 66.4%, bond allocation has fallen to 17%, and cash allocation is only 9.4%, a record low.

Bank of America believes that excessively high leverage does not necessarily mean the bull market is over immediately, but it makes the market more sensitive to unexpected negative news. The bond market is the biggest potential constraint, with US government debt about to surpass $40 trillion, interest payments of approximately $1.4 trillion in the past 12 months, and the 30-year Treasury yield recently rising to 5.126%, a 25-year high. A true end to a bull market typically requires the simultaneous occurrence of excessive leverage, excessive profit optimism, and policy tightening. Currently, the first two conditions are met; the election results and interest rate path will be key variables determining whether the bull market can transition from a strong upward trend to a bubble-like frenzy.

According to BlockBeats, on August 14th, analyst qinbafrank published an article comparing two leading companies in the US optical interconnect sector, Coherent (COHR) and Lumentum (LITE). The differences in their positioning determine different investment logics: Coherent is the leader in scale and platform of the US photonics industry, with advantages in scale, product breadth, manufacturing platform, and long-term technology stack and customer coverage; Lumentum, on the other hand, is the leader in the AI optics value pool with more prominent profit density and profit elasticity, and is significantly ahead in growth rate, gross margin, operating leverage, current operating quality, and net liquidity.

The size gap between the two industry leaders is narrowing rapidly—Coherent's revenue was 2.36 times that of Lumentum in fiscal year 2026, decreasing to 2.03 times in the fourth quarter of fiscal year 2026, and further narrowing to 1.84 times by the midpoint of the guidance for the first quarter of fiscal year 2027. Based on the midpoint of the next quarter's guidance, Coherent's revenue is approximately 1.84 times that of Lumentum, but its implied non-GAAP operating profit is only about 1.04 times; with approximately 2.03 times the quarterly revenue, Coherent only generated approximately 1.62 times the non-GAAP gross profit, 1.21 times the operating profit, and 1.08 times the net profit of Lumentum. This comparison clearly shows that Lumentum significantly outperforms Coherent in terms of earnings quality and operating leverage, while the gap between the two in terms of revenue and profit scale is rapidly narrowing.