Raymond James sees Charter capex benefiting Harmonic, AAOI shares

The key signal is not the modest capex guide itself, but the sequencing: broadband infrastructure spend is holding up now while management is explicitly telegraphing a steeper downshift later. That creates a two-stage trade for vendors: near-term order visibility stays intact, but the forward multiples for names exposed to a single cable customer should compress once investors start discounting 2027-2028 air pockets. The market is likely still underpricing how quickly sentiment can rotate from “capex resilient” to “capex cliff” once the Street sees a second consecutive year of flat-to-down operator spending.

HLIT is the cleanest beneficiary because its broadband-only profile removes video dilution and forces the market to focus on the part of the business most leveraged to cable upgrade cycles. The asymmetric setup is that any incremental spend on scalable infrastructure disproportionately flows to a narrower set of incumbents with proven execution, while weaker adjacent suppliers face share loss even if the overall pie is only flat. By contrast, AAOI and CIEN are more exposed to timing risk: if charter-like spend is pulled forward today, their upside is mostly a near-term estimate reset, not a durable growth re-rate.

The contrarian read is that the market may be overreacting to the “down meaningfully beyond 2026” headline and underestimating the optionality from customer churn. Broadband net adds deteriorating this fast can force operators to spend defensively on network quality and retention, which supports vendor orders even in a down-capex environment. The bigger risk is not lower cable capex per se, but a slower-than-expected pass-through from capex to vendor revenue if operators prioritize software, maintenance, or internal productivity over new hardware.