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Shares of fiber-optic component Finisar (FNSR) this morning have made a big turnaround from last night’s decline, jumping $2.39, or 9%, to $28.03, as analysts look past the company’s weaker forecast for this quarter to remarks on the conference call following the report that suggested that Apple (AAPL) will buy a lot of vertical-cavity surface-emitting lasers, or “VCSELs,” from Finisar for the next iPhone, with sales starting later this year.

The VCSELs are expected to allow the iPhone to perform “3-D sensing,” whereby it can be used to authenticate an iPhone user by scanning their face, and even, perhaps, create forms of "augmented reality” by placing virtual objects within the field of view of the phone’s camera in proper proportion.

While Finisar didn’t mention Apple specifically, CEO Jerry Rawls said that revenue would resume in the “second fiscal quarter,” the one ending in October, driven by sales of a couple of things, including VCSEL “arrays for 3D sensing."

Asked about who it was selling to, Rawls said multiple customers are interested, but initially, “predominantly one customer,” which is code for Apple as far as everyone is concerned.

MKM Partners’s Michael Genovese, who has a Buy rating on Finisar, writes that the “catalysts” for Finisar’s October quarter are “strongly intact”:

More importantly, as we previewed, management reiterated multiple positive drivers for 2QFY18 (Oct.) and beyond. First, QSFP28 (100G Datacom) continues to be sold out and pricing is holding up better than expected. Second, the company believes it should have ~$20mn in 3D sensing revenues in 2QFY18, with good GMs, which is higher than we are modeling. Third, the company is likely to be qualified for WSS/ROADM and CFP2-ACO to Verizon (VZ, Not Rated) through Cisco (CSCO, Neutral, $31.58, $34 FV) by 2QFY18. Finally, Finisar is fully qualified again for CFP and CFP2 at Huawei. The Chinese inventory work down and demand recovery remains murky (unclear if China will be up q/q in 2QFY18), but we believe China will recover in late CY17 or early CY18.

B. Riley’s Dave Kang also reiterates a Buy rating, and a $38 price target, writing that Finisar’s “QSFP28” transceiver is "now material enough to be a needle mover,” that the sales of fiber optics in China "could be bottoming in F1Q,” and that revenue from 3-D sensing should have a “significant ramp in F2Q and beyond."

Specifically, "We expect 3D sensing revenue to be few million dollars in F1Q, increasing to low 8‐ figures in F2Q. The company has been and will continue to ramp capacity throughout CY17 and beyond.

One derivative of Finisar’s news might be AXT Inc., according to Dougherty & Co. analyst Joe Maxa, who reiterates a Buy this morning, writing that AXT could also be a supplier of components for 3-D sensing:

FNSR announced during its earnings call last night that it (is now the second company – in addition to LITE) to receive production purchase orders for its VCSEL arrays for 3D Sensing. It expects to ship millions of devices in its second fiscal quarter ending October and 10’s of millions of devices per quarter in future quarters (starting in CY18). We are not aware of any 3D Sensing orders for AXTI yet, but the company has been in dialogue with customers and has been building inventory. We continue to believe it is only a matter of time before AXTI participates. 3D Sensing volumes will ramp and AXTI is one of only three qualified substrate providers. In addition to the 3D Sensing commentary, FNSR noted it continues to see strength in 100G Datacom (30% Q/Q growth) and weakness, but recent stabilization from Chinese telecom OEMs. We note 100G Datacom is a growth driver for AXTI and its PON orders have strengthened from prior quarters (multiple markets and customer). Overall, we continue to anticipate upside to AXTI’s near-term estimates and believe 3D Sensing can drive revenues meaningfully higher in 2018.