r/GrowthStockswithValue

Hi, all. My first post here, I hope it adds value.
I'm a simple momentum investor: I look for price trends and buy what's going up. Beyond that I don't look much at Fundamentals at all.

On 9/14 I found TXG, and it's become my yardstick for anything else. From mid-May it's just pretty much been "up and to the right."
I asked AI this morning about its whole story from IPO in 2019, and especially the past 5 months 300+% run, and I won't paste that all here (mostly because I can't defend it, as I'm not a Fundamentals guy).

But it sounds to me like they have a moat in the areas of "sincgle-cell RNA sequencing" and "spatial biology."
AI also notes that they operate on a "razor and blades" model, where they sell the machines that do the sequencing (the razor), but then users have to buy the "specialized consumable reagent kits and microfluidic chips (the blades) needed to run every single experiment."

I mostly just know that it's up 40% since I bought it 20 days ago, and I've been adding more (with a 10% trailing stop on all shares).

If anyone feels like digging into it further, I'd love to hear your take on it. I see the history of it, and it's been boom-and-bust at least twice, which is why I'm keeping a tight stop on it.

Here's the Google query I used:
TXG went public in 2019. In about a thousand words, can you give me a narrative of what they do, what their products are, and their stock price performance since then? Especially focus on the past 5 months.

I’ve talked about photonics quite a bit this year, and I have relatively high exposure to the space. So when $LITE, $COHR and $AAOI started moving sharply, I obviously paid attention.

But for me, the interesting part isn’t simply that the stocks are up.

It’s where the value could actually move through the supply chain.

🐊 The latest catalyst is policy, but it’s not a done deal.

Morgan Stanley’s Washington checks suggest the FCC is discussing restrictions on Chinese optical transceivers, potentially starting with 3.2T modules, with implementation potentially beginning as early as October.

The important detail is that this appears to be a policy discussion, not a final rule. The FCC’s September equipment-authorisation decision did not include optical transceivers, after earlier reports had raised concerns about possible restrictions.

There is also a separate bipartisan Senate bill targeting Chinese-made transceivers in sensitive federal national-security systems. That’s a procurement restriction, though not the same thing as a broad import ban.

🐊 But here’s the part I think the market needs to think about more carefully.

If the reported 65% US-content framework is how the FCC ultimately approaches 3.2T, the key question isn’t necessarily:

“Who replaces the Chinese transceiver makers?”

It could be:

“Who supplies the valuable components inside those Chinese transceivers?”

If the test is based on the value of components supplied by US companies rather than where the module is physically assembled, a Chinese module maker could potentially remain the assembler while sourcing more of the DSP and laser content from US suppliers.

That changes the thesis.

The opportunity may not be US transceiver manufacturing replacing China.

It may be US component suppliers capturing more of the economics underneath the module.

🐊 And that’s where I find the second-order effect more interesting.

Think DSPs. Lasers. TIAs. Drivers.

And separately, InP substrates.

But I would keep the InP thesis separate: InP may be a critical capacity bottleneck, but it doesn’t drive the 65% BOM calculation.

Morgan Stanley’s broader photonics work has also highlighted tight component capacity and the importance of InP supply.

🐊 The timing matters too.

Even if policy action comes as early as October, that doesn’t mean a 2026 revenue explosion.

The 3.2T ramp is still a future event.

So I don’t want to chase a headline simply because photonics stocks are moving.

For me, the real question is whether this policy becomes a catalyst for pricing power, qualification wins and incremental component content over the next few years.

That’s a much more interesting investment question than simply asking which stock is up today.

And it also changes how I look at $AAOI.

I wouldn’t call AAOI a straightforward policy beneficiary based solely on the 65% framework. I’d look at it more through its capacity, qualification and ability to win share.

The deeper thesis remains the same:

Don’t just look at the company making the final product. Look one layer underneath.

Because sometimes the biggest opportunity isn’t the company everyone is talking about.

It’s the supplier whose component everyone suddenly needs.

Not an investment advice.