Stock Movers: Crest Nicholson, Soitec, Deutsche Telekom(Podcast)

In telecom, the more important signal is not the merger headline itself but the shrinking probability of a capital-intensive, politically messy corporate action. That is usually positive for the operating asset with the cleaner U.S. cash-flow profile, while the parent becomes a “show me” story: either monetize non-core holdings or intensify buybacks, or the activist premium fades. The key second-order effect is that cross-border telecom M&A often creates months of dead money; removing that path can re-rate the target faster than the seller, even if both names trade on the same news.

For Soitec, the market is likely underestimating how much photonics demand changes the mix of the business. If this is tied to AI networking / optical interconnect buildout, the revenue quality is better than mainstream semiconductor cyclicality because the content per system can rise faster than unit shipments, supporting utilization and gross margin. The risk is that photonics is still a narrow demand vector; one or two strong quarters can look like a secular inflection until backlog and customer concentration reveal whether this is a durable ramp or a pull-forward.

Contrarian takeaway: the consensus may be too focused on the activist angle as a catalyst rather than a constraint. If no formal transaction follows, the telecom spread can mean-revert quickly, while the real medium-term winners are whichever management teams can convert “no deal” into higher distributions and cleaner capital allocation. For Soitec, the move may be underdone if optical capex is just beginning; it is overdone if this is mostly order timing and not design-win conversion.