Someone my wife & I were going with can no longer join us. I know it’s a bit last min but thought I’d ask rather than just let the ticket go to waste. You can look up the deets on the Pint of Science website.
So first of all, despite the click-baity title, I’m not so petty or naive to be treating this as some kind of victory lap - I know sometimes things can and do turn on a dime for companies of this size and it’s too early to be jubilant. But, some more details have emerged since my last post on the 16th of March (then $2.10, now $5.50~, though it has briefly dropped under $5 several times over the past few days) which some of you might find reassuring, if not encouraging, and hopefully the momentum currently building up will be enough for me to post about $KOPN for the last time here as we begin our ascent towards the analysts’ price targets.
Secondly, I have decided to reuse the images from my previous post as well as some of the text but I have updated the information to reflect the new details I have since unearthed so just bear with me - it’s not a straight up copy/paste job.
Anyway, without further ado, here are my 7 reasons to go long on $KOPN right now.
With the Pentagon’s push for all-U.S. manufacturing and the focus on domestic production of critical military components, Kopin is quickly positioning itself to grab the attention of the DoW and capitalize on the new legislation. While many U.S. manufacturers are still fabless, Kopin boast multiple, ISO 9001:2015- and ISO 13485-certified Class 10 cleanrooms (2nd highest class) across the U.S. & UK, own 200+ patents and have recently announced the establishment of full-scale U.S. OLED MicroDisplay manufacturing capability. They are also the only company in the U.S. offering MicroLED, OLED, AMLCD, bi-directional pixel architectures, AI-enabled backplates, and FLCoS spatial-light-modulator products under one banner. Their R&D continues to be funded by the government through Phase I & II SBIR awards, giving them the ability to develop some of their technology without having to pay out of their own pockets. The quality of their products is really hard to beat, which is why they were selected by Elbit Systems to produce Helmet-Mounted Display Systems for the F-35 fighter jet, as well as by Lockheed Martin to produce Visual Display Subsystems for the replacement to the Stinger which is currently in the works. Speaking of which…
Primes know when to build in-house and when to outsource, and when Lockheed Martin (LMT) goes head-to-head with Raytheon (RTX) on a major Army program, I don't think they'll be taking chances on a jingus rig in a backyard shed when it comes to sourcing the components. Just as a bit of background, NGSRI is being developed to create lower-cost alternatives to the currently unsustainably expensive defenses against drones, cruise missiles and helicopters. In other words, the Army is looking for a potential replacement for the 40+ year old Stinger system which, through its lifespan, has been exported to 20~ countries in multi-billion transactions (NATO still continues to order more). Should Lockheed succeed and retain Kopin as a supplier, there is potential for large revenue (tens of millions based on a moderately sized order of 5,000 systems, not including upgrades, spares and support). In January, Lockheed announced they successfully completed the first flight test of NGSRI - ahead of Raytheon, who are lagging behind and to date have only managed a ballistic test, but not a full flight test. Now, this is as far as the information went in my last post, but since then they announced that a) they successfully completed the Seeker Characterization Flight Test (SCFT) - a critical risk reduction milestone for the program, and b) posted several NGSRI-specific vacancies on their website, with language used emphasizing “production ready logic,” “delivery,” “manufacturing flow,” and scaling. This may suggest the program is mature enough that Lockheed is staffing for sustained execution rather than just concept studies, though the expected announcement date of 2027 still remains.
Now, this one turn a lot of head recently, not least because the CEO said they have two very specific NDAs signed with two of the 5 biggest semiconductor companies in the world with regards to this technology, which he listed as “Nvidia ($NVDA), AMD ($AMD), Intel ($INTC), Micron Technology ($MU) and Samsung” - you can imagine what would happen to a $5 stock if even one of those names expressed explicit interest in Kopin, leave alone two of them. As per the announcement: “Data centers consume an outsized portion of the world’s energy and are rapidly increasing. Neural I/o™ will be designed to achieve the same functional outcome with a fraction of the power by using photons instead of electrons to move data, eliminating copper interconnects and expensive laser-based systems entirely. The architecture uses each MicroLED pixel as a high-speed transmitter, sending digital bits at extremely fast rates and enabling real-time GPU-to-GPU data exchange at massive scale. The collaboration combines Kopin’s deep expertise in MicroLED materials, process development, and manufacturing with Fabric.AI’s system-level design, marketing and sales focus being developed for AI factory infrastructure. Under the agreement between the companies, Kopin owns 19.9% of Fabric.AI and will be the exclusive manufacturer of the Neural I/o™ chipsets.”
Depending on what type of AR systems you look at, the current market for just military applications is already valued at about $1.7B-$3.2B, with projections of 12%-16% CAGR by 2034-2035, bringing the totals in some scenarios to double digits in a decade's time. Having primarily followed military stocks of various flavours in the past few years, I think there is a number of factors to justify these valuations and their increases. War has always been a complex business but in the era of drones and high-tech ISR, clarity on the battlefield and enhanced situational awareness will be key, and AR systems will be able to, as one article puts it better than I could, "reduce cognitive burden on soldiers by delivering mission-critical information — maps, enemy positions, waypoints, and threat alerts — directly within their field of vision, without requiring them to look away from the battlefield". It is only in recent years that the relevant tech got small, fast and smart enough for these systems to mature into field-worthy products. As armies around the world carry on with their eternal quest to modernize and large-scale integration of AR into their training routines gets underway, KOPN is already here, as are the 400,000 defense vision systems they have shipped out to date.
I don’t need to caption this one, do I?
No caption needed here, either. Suffices to say we are currently at the highest price since 2021.
Another reason why the military AR market is expected to grow substantially over the next 10 years is the drone + AR platform convergence. Anyone who has followed military stocks or even just the global news over the past few years, must be aware of how large a part drones play in modern warfare. Many various components are used in the manufacturing of modern UAS and optics play no small part. Highly successful emerging players such as ONDS and UMAC (both of whom I have, coincidentally, been invested in for a good while without knowing they had had an eye on KOPN) obviously recognize the importance of this and see it as a worthwhile investment. The Trump Jr.-backed UMAC seems like an especially promising revenue stream in the short term as not only have they been using KOPN's optics in their FPV goggles for a while now, the CEO also said that about half of the recent Drone Dominance Program Gauntlet 1 winners are UMAC customers so I expect a trickle-down effect should reach KOPN in not too distant future (ONDS, I assume, needs no introduction - it was being touted quite loudly here only last year and has since hit mid-teens). The Gauntlet, may I add, was just the 1st out of 4 Gauntlets planned by the DoW - each with an increasing number of drones being procured, and the recent ban on Chinese parts/push by the DoW to prioritize domestic supply chains only stands to benefit UMAC and, consequently, KOPN. Overall, I think this placement meaningfully reduces liquidity risk and gives KOPN capital to scale production and absorb near-term working capital needs. Not only is this a good de-resking pot of money for a small cap like KOPN, ONDS, UMAC and THEON are strategic, defense-aligned investors which further increases commercial leverage - i.e., capital plus potential route-to-market partners rather than just passive financiers. The partnership with THEON especially opens up the EU/NATO markets. Also, two things happened since my last post. Firstly, UMAC announced they will soon be ordering $75M worth of raw materials and components to satisfy the current drone demand. Secondly, KOPN announced a $3.2 Million Initial Contract for Innovative First Person Viewer Optical Modules, Marking Entry into the FPV Drone Market.
There has, of course, been more than that (orders from primes and Tier-1 aerospace companies) and I will list a few other things below but I think the above 7 give the most food for thought. The current financials are nothing to write home about but nothing to scoff at, either, and I'm seeing some similarities to the earlier stages of the optics-related LightPath Technologies (LPTH) which has done very well for me to date. Importantly, the CEO said in a recent interview that they are fully funded until at least Q2 2027 - no dilution needed. Some financial strain was put on the company in September last year when the court ordered them to pay about $20M in damages over a dispute with another company from way back in 2006.
As it often happens with small cap defense companies, the revenue can be a bit lumpy and prone to the whims of the DoW machine so this should certainly be something to keep in mind. I have watched several interviews with the CEO and he seems to have his head fairly screwed-on which is always reassuring, especially in a company this size. He only took over about 3 years ago but is already managing to turn the company around.
All in all, I see it as a decent long-term play with potentially good returns from about 2027-2028, which means I'm not jumping into this head-long and I'll keep adding more shares in small lumps - hopefully by the time things take off I will have accumulated a fair amount.
Always do your own DD before investing. AI has only been harmed a little bit during the making of this post, but it hurt me back so it’s ok. May peace, untold riches and eternal youth befall all of you fellow investors and traders. See you on the dance floor.
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>WESTBOROUGH, Mass. – Kopin Corporation (NASDAQ: KOPN), a leading provider of application-specific optical systems and high-performance microdisplays, including MicroLED displays, today announced a strategic collaboration with Fabric.AI (NASDAQ: SBLX), a leading developer of fabless semiconductor solutions for AI infrastructure, to develop MicroLED-based optical interconnect technology that will be designed to replace traditional copper wiring between GPUs and high-performance processors for smart data centers. Fabric.AI has placed a $15M purchase order with Kopin to fund the demonstration chipset.
>The jointly developed Neural I/o™ optical interconnect technology offering leverages Kopin’s proprietary MicroLED and patented bi-directional NeuralDisplay™ architecture, repurposing programmable MicroLED pixels as ultra-high-speed optical transceivers capable of moving data at ultra-high speeds while consuming significantly less power per bit than existing solutions.
>Today’s GPUs rely on dense copper wiring to communicate with each other, consuming enormous amounts of energy to maintain high-bandwidth data transfer and to cool the system. As artificial intelligence continues to scale, traditional data-center architectures are approaching their operational limits and are being criticized for their energy consumption and environmental impact. Data centers consume an outsized portion of the world’s energy and are rapidly increasing. Neural I/o™ will be designed to achieve the same functional outcome with a fraction of the power by using photons instead of electrons to move data, eliminating copper interconnects and expensive laser-based systems entirely. The architecture uses each MicroLED pixel as a high-speed transmitter, sending digital bits at extremely fast rates and enabling real-time GPU-to-GPU data exchange at massive scale.
>“The two biggest challenges facing virtually every at-scale AI deployment are power and bandwidth,” said Matt Kimball, Principal Analyst at Moor Insights & Strategy. “The ability to enable chip-to-chip and system-to-system connectivity in a way that enables the full throughput of the accelerator without taxing the power budget has been a persistent challenge. With its Neural I/o technology, built on MicroLED technology, Kopin presents a unique, compelling value proposition.”
>The collaboration combines Kopin’s deep expertise in MicroLED materials, process development, and manufacturing with Fabric.AI’s system-level design, marketing and sales focus being developed for AI factory infrastructure. Under the agreement between the companies, Kopin owns 19.9% of Fabric.AI and will be the exclusive manufacturer of the Neural I/o™ chipsets.
>Kopin is the leading U.S. based producer of MicroLED displays, giving the Company a uniquely strategic position as demand for domestically sourced, high performance MicroLED components accelerates. With more than 40 years of experience delivering advanced display technologies, Kopin’s U.S. manufacturing capability provides partners with a secure, reliable, and scalable supply chain-an increasingly critical advantage as MicroLEDs become foundational to next generation defense and industrial displays, and now AI infrastructure systems.
>The Neural I/o™ product line has the potential to fundamentally reshape Kopin’s growth trajectory. By extending its MicroLED and NeuralDisplay™ capabilities into AI infrastructure, Kopin gains access to the rapidly expanding AI hardware ecosystem – an ecosystem that desperately needs the faster, lower-power performance that Kopin’s technology is expected to provide. This collaboration with Fabric.AI leverages Kopin’s core capabilities into an enormous and fast-growing market.
>Management Commentary
>Michael Murray, Chief Executive Officer of Kopin, said: “The marriage of our MicroLED technology with our bi-directional NeuralDisplay™ architecture is exactly what the industry needs to break through current interconnect bottlenecks. With Kopin and Fabric.AI’s jointly developed Neural I/o™ technology, we are creating a faster, more efficient optical interface that is expected to be uniquely capable of supporting GPU-to-GPU communication at the massive scale this market requires – it’s the right technology at the right moment to power the next wave of AI acceleration.”
>“What makes this opportunity particularly compelling for Kopin is the breadth of its application. Our MicroLED and NeuralDisplay capabilities, originally developed for Virtual Reality and Augmented Reality applications in the defense and industrial markets, are now being extended into one of the fastest-growing segments of the technology market. We believe this collaboration with Fabric.AI expands Kopin’s market opportunity dramatically as a strategic enabler of the coming wave of AI infrastructure, positioning us to create significant long-term value for our shareholders, said Murray.”
>Josh Silverman, Chief Executive Officer of Fabric.AI, added, “MicroLED-based interconnects are the leading edge in infrastructure for AI data centers. Kopin’s bi-directional MicroLED technology is the foundation of our optical interconnect architecture. Their expertise in MicroLED materials and fabrication, combined with our innovative system-level design for AI factories, creates a patent-protected technology position that we believe will define the next generation of data-center communication. This is a true technology partnership – Kopin brings the enabling hardware, and together we are building the infrastructure layer that AI factories will require to scale.”
$KOPN now cutting into the AI space is crazy and if executed well, could mark a huge milestone for the company. That's on top of all the other things I listed in my post a month ago, since which time the stock has shot up over 140% at the time of writing this post. If you haven't read it, check it out:
Kopin (KOPN) - 3 positive signals for mid- to long-term gains : r/pennystocks
