Home / Themes / Optical Connectivity '26: AI Optical Transceivers
Optical Connectivity '26: AI Optical Transceivers (view performance)
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Bull / Bear Details has the investment thesis and bull/bear points. Overview is monitoring guidance (hiring, forums, second-order trends, search keywords, Google Trends, datasets).
Bull / Bear DetailsAI's insatiable demand for bandwidth drives a structural shift to photonic interconnects and advanced optical transceivers (800G/1.6T, CPO, SiPh) in data center
Thesis
AI's insatiable demand for bandwidth drives a structural shift to photonic interconnects and advanced optical transceivers (800G/1.6T, CPO, SiPh) in data centers. This creates a multi-billion dollar market and significant "picks and shovels" opportunities. The bull case is more compelling due to accelerating demand and technological necessity.
Bull case
The massive and ongoing capital expenditures by hyperscalers for AI data centers are driving explosive, sustained demand for high-bandwidth optical transceivers (800G/1.6T) and related infrastructure. This is evidenced by record bookings extending into 2028 and multi-year customer agreements, validating a fundamental and accelerating tailwind for the theme.
Physical limitations of electrical interconnects (heat, power, signal loss) are accelerating a fundamental, secular shift to photonic-based technologies like Co-Packaged Optics (CPO) and Silicon Photonics. This transition, driven by the "Memory Wall" and need for higher data rates and energy efficiency, is now entering mass production with significant CPO deployments and multi-billion dollar market opportunities.
Persistent supply chain bottlenecks for critical photonic materials (e.g., Indium Phosphide wafers) and specialized manufacturing equipment are driving significant "picks and shovels" investment opportunities. Companies are aggressively expanding capacity, with Coherent's 6-inch InP ramp ahead of schedule and Lumentum acquiring new fabs, signaling strong capital deployment to meet demand.
Bear case
Many established players in the AI optical connectivity space are currently "priced for perfection," with valuations (e.g., P/E, P/S, EV/EBITDA) significantly stretched compared to historical averages and industry peers. This leaves minimal margin for error, making the theme highly susceptible to any slowdown in demand or execution missteps.
The transition to advanced technologies like Co-Packaged Optics (CPO) and the ramp of 1.6T transceivers face significant execution risks and persistent supply chain constraints. Manufacturing complexity, component availability (DSPs, TIAs, EMLs, pump lasers, InP), and yield issues could delay widespread adoption and cap revenue potential, despite strong demand.
Several companies within the theme retain significant exposure to more cyclical and slower-growing legacy end markets, such as traditional telecom or industrial. Downturns or muted growth in these segments can partially offset the strong AI-driven optics growth, potentially diluting overall financial performance and investor sentiment.
Overview
Hiring Trend Watchpoints
Forum Watchlist
- subreddit — r/hardwaremedium
Discussions on new AI hardware, data center builds, and general component performance.
- subreddit — r/homelablow
Enthusiast discussions on high-speed networking, server builds, and optical components at home.
- subreddit — r/networkinghigh
Professional discussions on data center interconnects, optical switches, and new networking standards.
- subreddit — r/datacenterhigh
Discussions on hyperscaler builds, power/cooling, and infrastructure components.
- forum — ServeTheHome (STH) forumshigh
Enterprise/prosumer level discussions on new hardware, benchmarks, and real-world deployment challenges.
Industry Publications
- LightCounting (lightcounting.com) — Primary source for optical transceiver market data, forecasts, and CPO/SiPh adoption rates.
- Dell'Oro Group (delloro.com) — Provides market research and forecasts for data center networking, optical transport, and CPO adoption.
- FierceTelecom (fiercetelecom.com) — Industry news, analysis, and trends in telecom and optical networking.
- Yole Group (yolegroup.com) — Market research and technology analysis for photonics, silicon photonics, and advanced packaging.
- OFC Conference News (ofcconference.org) — Official news and technical papers from the leading optical fiber communication conference.
- EE Times (eetimes.com) — Deep technical coverage of semiconductor, AI, and optical component developments.
- AnandTech (anandtech.com) — In-depth reviews and analysis of data center hardware, including networking and AI accelerators.
- Data Center Dynamics (datacenterdynamics.com) — Global news and analysis on data center infrastructure, including power, cooling, and connectivity.
Second Order Trends
Search Keywords Brand Product
- 800G transceiver
- 1.6T transceiver
- Co-Packaged Optics CPO
- Optical Circuit Switching OCS
- Silicon Photonics SiPh
- Indium Phosphide InP
- EML laser
- CW laser
- Narrow Linewidth Laser
- Pump Laser
- Tomahawk 6
- Jericho 3
- Jericho 4
- COLORZ 800
- Structera CXL
- NVLink Fusion
- Thermadite material
- Multi-rail systems
- Quantum Link software
- ELS module
- 1.8 GHz amplifier
- VMware Cloud Foundation
- OCTEON
- Teralynx
- Bravera SSD Controller
- Photonic Fabric
- PAM4 DSP
- Coherent Light DCI Modules
- 1.6T Ethernet
- 51.2T Switch
- 200T Ethernet
- UALink Switch
- ESUN Switch
- PCIe Gen 6
- CXL 3.1
- XPU
- NIC
- CXL Memory Expander
- ZR/ZR+ transceiver
- VCSEL laser
- Wavelength Selectable Switch WSS
Search Keywords Policy Regulatory
- CHIPS Act funding
- US semiconductor manufacturing
- domestic production optical components
- supply chain resilience AI hardware
- tariff optical components
- CXL Consortium
- FCC ban Chinese transceivers
Search Keywords Event Phrases
- OFC Conference
- Optical Fiber Conference
- FMS Flash Memory Summit
- AI supercycle
- NVIDIA GTC
- data center capacity expansion
- DOCSIS 4.0 upgrades
- Lumentum Greensboro fab
Google Trend Product Category Intent
Google Trend Consumer Intent
Google Trend Macro Policy Terms
Top datasets to track
1. Global AI Data Center Optical Transceiver Market Revenue Type: Market Research · Provider: LightCounting Cadence: Annually (with quarterly updates) Why it matters: Directly tracks the growth and size of the core market for AI optical transceivers, validating the theme's expansion. Suggested query: LightCounting AI optical transceiver market size Confidence: high
2. Co-Packaged Optics (CPO) Revenue Share Type: Market Research · Provider: LightCounting Cadence: Annually Why it matters: Monitors the industry's transition to advanced CPO solutions, indicating technological adoption and long-term growth for the theme. Suggested query: LightCounting CPO market share Confidence: high
3. Hyperscaler Capital Expenditure (CapEx) Forecasts Type: Financial Data · Provider: Gartner, IDC, Company Earnings Calls Cadence: Quarterly/Annually Why it matters: Hyperscaler CapEx is the primary driver of demand for AI data center infrastructure, directly impacting optical connectivity providers. Suggested query: Hyperscaler CapEx forecast Confidence: high
4. Optical Component Lead Times Index Type: Supply Chain Data · Provider: Supplyframe, Industry Reports Cadence: Monthly/Quarterly Why it matters: Indicates supply-demand balance and potential bottlenecks for critical components like lasers and InP wafers, affecting revenue realization and pricing power. Suggested query: Optical component lead times Confidence: high
5. Job Postings for Photonics/CPO Engineers Type: Alternative Data (Labor Market) · Provider: Thinknum, LinkedIn Talent Insights Cadence: Monthly Why it matters: Signals investment in R&D and manufacturing capacity for advanced optical technologies, reflecting confidence in future growth and onshoring efforts. Suggested query: Job postings Silicon Photonics CPO Confidence: high
Key Metrics
| Metric | Cadence | What It Signals | Update Source |
|---|---|---|---|
| Global AI Data Center Optical Transceiver Market Revenue (USD Billions) | Annually (with quarterly updates) | Accelerating growth indicates robust demand for optical connectivity in AI data centers, validating the theme's expansion and investment opportunities. | LLM_Approved |
| Co-Packaged Optics (CPO) Revenue Share of Total Optical Transceiver Market (%) | Annually | Increasing share signals a successful industry transition to more advanced, power-efficient CPO solutions, indicating long-term technological adoption and growth for the theme. | LLM_Approved |
| Hyperscaler Capital Expenditure (CapEx) Forecasts (USD Billions) | Quarterly/Annually | Sustained or increasing CapEx indicates strong investment in AI data centers, directly driving demand for optical connectivity and validating the theme's growth. | LLM_Approved |
Upcoming Catalysts
| Catalyst | Estimated Timing | Estimated Date Start | Estimated Date End | Why It Matters | Ticker Or Theme Specific | Source Types | Contributing Tickers | Mention Count | Base Score | Source Weight | Specificity Weight | Macro Bridge | Macro Bridge Multiplier | Theme Score | Date Aggregated | Manual Override | Bridge Mention Count | Theme Base Score | Theme Importance Score | Catalyst Source | Catalyst ID | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NVIDIA's Spectrum-X CPO switch platform is entering real-world deployment, and Broadcom's CPO switch is in limited shipments, marking the official transition of Co-Packaged Optics (CPO) into the mass production phase with expected further expansion in H2 2026. | Ongoing through H2 2026 | 2026-08-01 | 2026-12-31 | CPO represents a fundamental technological shift for AI data centers, promising significant improvements in power efficiency and bandwidth. Its successful and accelerated deployment validates the long-term thesis for advanced optical solutions and benefits companies involved in CPO development and manufacturing. | Theme | theme_composer | COHR, LITE, MRVL, AVGO | 4 | 24.7456 | 1.18 | 0.92 | 1.0 | 2686.3828 | 2026-08-26 | False | 1 | 1.0614 | 115.2289 | Theme composer | ||||
| Optical connectivity providers are continuing to ramp up production and shipments of 1.6T transceivers, with increasing revenue contributions expected as hyperscalers upgrade their AI data center networks. | Ongoing through H2 2026 | 2026-07-01 | 2026-12-31 | 1.6T transceivers are the next generation of high-speed interconnects crucial for meeting the escalating bandwidth demands of AI workloads. A strong and sustained ramp indicates robust market adoption and significant growth opportunities for manufacturers. | Theme | theme_composer | COHR, LITE, AAOI, MRVL | 4 | 24.7019 | 1.18 | 0.92 | 1.0 | 2681.6366 | 2026-08-26 | False | 1 | 0.6747 | 73.2435 | Theme composer | ||||
| Optical component manufacturers are actively expanding their production capacity for critical components like 6-inch Indium Phosphide wafers and Electro-absorption Modulated Lasers (EMLs) to address industry-wide supply constraints. | Ongoing through H2 2026, with key milestones by year-end | 2026-07-01 | 2026-12-31 | Supply bottlenecks for Indium Phosphide and EMLs have limited the ability of companies to fully capitalize on surging AI-driven demand. Successful capacity ramps are essential for increasing output, improving gross margins, and ensuring the long-term growth of the optical connectivity market. | Theme | theme_composer | COHR, LITE, AAOI | 3 | 13.0019 | 1.18 | 0.92 | 1.0 | 1411.4846 | 2026-08-26 | False | 1 | 0.429 | 46.5669 | Theme composer | ||||
| Commencement of initial production at the new 210,000 square foot facility in Sugar Land, Texas, dedicated to 800G and 1.6T transceiver manufacturing. | late in the third quarter | 2026-09-01 | 2026-09-30 | This facility expansion is crucial for alleviating production capacity constraints for next-generation AI optics, enabling AAOI to meet surging customer demand and support its aggressive revenue growth targets. | Ticker | AAOI (ticker) | AAOI_818ff605 | 2026-08-06 | earnings_transcript | ||||||||||||||
| Full qualification of the first 1.6T product by a major hyperscale customer, followed by initial volume shipments. | within the next couple of weeks (for qualification) followed by shipments beginning later this quarter | 2026-08-21 | 2026-09-30 | This is a critical step for AAOI to begin generating revenue from its high-margin 1.6T transceivers, re-establishing a key customer as a 10%+ contributor, and driving future growth in the AI data center market. | Ticker | AAOI (ticker) | AAOI_f6e8ddfe | 2026-08-06 | earnings_transcript | ||||||||||||||
| 1.6 terabit transceivers begin to contribute to revenue (management said 1.6T products are on track to start contributing later in 2026). | later this year | 2026-06-01 | 2026-12-31 | 1.6T is described as a higher‑margin, strategic next‑gen product; early contribution would improve gross margins and long‑term ASPs, while delays would push margin expansion and the multi‑year growth thesis out further. | Ticker | AAOI (ticker) | AAOI_9fd9d6e7 | 2026-02-26 | earnings_transcript | ||||||||||||||
| Ramp up of high-volume shipments of TPU version 8i to Google, accelerated shipments of Ironwood to Anthropic, continued shipments of Jalapeno for OpenAI, and production shipments of Meta's custom MTIA accelerator. | Q4 2026 | 2026-09-01 | 2026-11-30 | These deployments are expected to drive Q4 AI revenue to $21.7 billion, up 236% year-on-year, demonstrating strong execution and demand in their key AI semiconductor business. | Ticker | AVGO (ticker) | AVGO_d6960b6c | 2026-09-02 | earnings_transcript | ||||||||||||||
| Successful launch and initial deployment of the first $35 billion trench of the AI XPU platform with Apollo and Blackstone. | currently being launched | 2026-06-03 | 2026-09-30 | This strategic initiative aims to provide significant compute capacity to leading AI frontier labs, potentially expanding Broadcom's market reach and revenue opportunities beyond direct chip sales. | Ticker | AVGO (ticker) | AVGO_632c1276 | 2026-06-03 | earnings_transcript | ||||||||||||||
| Broadcom's actual AI semiconductor revenue for Q3 fiscal year 2026 compared to its guidance of $16 billion. | in Q3 | 2026-07-01 | 2026-09-30 | As the primary growth driver, performance against this guidance will be a critical indicator of the strength of the AI supercycle and Broadcom's competitive position, directly influencing investor sentiment. | Ticker | AVGO (ticker) | AVGO_a1ccd4f6 | 2026-06-03 | earnings_transcript | ||||||||||||||
| Broadcom's actual consolidated revenue for Q3 fiscal year 2026 compared to its guidance of $29.4 billion. | For Q3 2026 | 2026-07-01 | 2026-09-30 | Achieving or exceeding this guidance would reinforce investor confidence in Broadcom's growth trajectory, particularly in the rapidly expanding AI semiconductor market, impacting investor confidence and valuation. | Ticker | AVGO (ticker) | AVGO_9073cdaf | 2026-06-03 | earnings_transcript | ||||||||||||||
| Confirmation (or emergence) of constraints and committed supply from foundries (leading-edge 3nm/2nm capacity), HBM vendors and advanced packaging partners necessary to meet Broadcom's AI backlog. | over the next eighteen months (as backlog ships) | 2025-12-11 | 2027-06-11 | Secured wafer, HBM and advanced-packaging supply is required to meet Broadcom's AI delivery schedule; supply shortfalls would delay shipments, elevate costs and compress margins (bearish), while robust confirmations would support revenue delivery and margin plans (bullish). | Ticker | AVGO (ticker) | AVGO_9b05718d | 2025-12-11 | earnings_transcript | ||||||||||||||
| Conversion/realization of Broadcom's disclosed $73 billion AI-related order backlog (switches, XPUs, DSPs, optical components) which management expects to ship over the next 18 months. | to be delivered over the next eighteen months | 2025-12-11 | 2027-06-11 | The pace and completeness of backlog conversion will materially drive Broadcom's AI revenue growth, margin mix (systems/pass-through dilution), and supply requirements; faster conversion is bullish for revenue and valuation, while slower conversion or cancellations are bearish. | Ticker | AVGO (ticker) | AVGO_8104552d | 2025-12-11 | earnings_transcript | ||||||||||||||
| Broadcom has fully secured capacity for leading-edge wafers, high-bandwidth memory and substrates for 2026–2028. | for 2026 through 2028 | 2026-01-01 | 2028-12-31 | Mitigates supply constraints risk and provides visibility into delivery timelines and backlog, supporting investor confidence in growth trajectory. | Ticker | AVGO (ticker) | AVGO_c6986cdd | 2026-03-04 | earnings_transcript | ||||||||||||||
| Coherent expects to achieve its goal of doubling internal 6-inch indium phosphide output capacity. | by the end of next quarter, which is 1 quarter earlier than we thought | 2026-09-30 | 2026-09-30 | This milestone is crucial for alleviating supply constraints, lowering manufacturing costs, and is anticipated to drive gross margin expansion and accelerate revenue growth across high-demand product lines like transceivers and CPO. | Ticker | COHR (ticker) | COHR_edc4f770 | 2026-05-06 | earnings_transcript | ||||||||||||||
| Planned capacity milestone to be capable of producing over 500,000 pieces per month of 800G and 1.6T products (management target for end‑of‑year 2026). | by the end of this year | 2026-10-01 | 2026-12-31 | Hitting >500k units/month would remove a key supply constraint, enabling the company to convert demand into revenue at scale and supporting the $1B+ revenue and profitability targets; missing this would keep growth capacity‑limited and pressure guidance credibility. | Ticker | AAOI (ticker) | AAOI_e11e5db2 | 2026-02-26 | earnings_transcript | ||||||||||||||
| Broadcom beginning production of silicon for OpenAI's AI accelerators. | production late 2026 | 2026-10-01 | 2026-12-31 | This marks a significant milestone in Broadcom's partnership with OpenAI, a major AI frontier lab, and is crucial for its projected AI semiconductor revenue growth in 2027 and beyond. | Ticker | AVGO (ticker) | AVGO_3121e94d | 2026-06-03 | earnings_transcript | ||||||||||||||
| Execution and delivery of an $11 billion order of TPU 'ironwood' racks to Anthropic (management stated the $11B order is for delivery in late 2026). | delivery in late 2026 | 2026-10-01 | 2026-12-31 | Successful on-time delivery drives revenue recognition, backlog conversion and AI semiconductor/networks revenue in 2026; delays, cancellations or supply constraints would reduce near-term revenue and could worsen concentration risk and investor sentiment. | Ticker | AVGO (ticker) | AVGO_f8456d4a | 2025-12-11 | earnings_transcript | ||||||||||||||
| Delivery and execution of a $1 billion order from Broadcom's fifth XPU (customer accelerator) customer, noted as for delivery in late 2026. | delivery in late 2026 | 2026-10-01 | 2026-12-31 | Adds to AI backlog conversion and customer diversification; on-time execution supports FY2026 revenue and cementing design-win momentum, while delays or cancellations would reduce expected AI revenue and weaken investor confidence in broadening customer base. | Ticker | AVGO (ticker) | AVGO_98b78f53 | 2025-12-11 | earnings_transcript | ||||||||||||||
| Lumentum is on track to achieve more than 50% growth in EML units compared to the December quarter of 2025. | by the December quarter of 2026 | 2026-10-01 | 2026-12-31 | This indicates strong execution in a high-demand, high-margin product area, addressing supply-demand imbalance and driving overall revenue and profitability. | Ticker | LITE (ticker) | LITE_10285475 | 2026-05-05 | earnings_transcript | ||||||||||||||
| Marvell's Investor Day in New York City. | October 6 | 2026-10-06 | 2026-10-06 | Management will provide a deeper dive into longer-term growth drivers, including a robust detailed review of revenue through fiscal '29 and beyond for the custom business, which could significantly impact investor models and sentiment. | Ticker | MRVL (ticker) | MRVL_da818796 | 2026-08-27 | earnings_transcript | ||||||||||||||
| Broadcom's actual AI semiconductor revenue for fiscal year 2027 compared to its reiterated guidance of 'in excess of $100 billion'. | fiscal year 27 | 2026-11-01 | 2027-10-31 | This ambitious long-term target is a major driver of Broadcom's valuation. Achieving or exceeding it would be a significant bullish catalyst, while any shortfall could materially impact investor sentiment. | Ticker | AVGO (ticker) | AVGO_539a5499 | 2026-06-03 | earnings_transcript | ||||||||||||||
| Execution of the multi‑year alignment/agreement with OpenAI to support ~10 gigawatts of capacity across the 2027–2029 timeframe (management referenced the 10 GW alignment running through '27–'29). | 2027 through 2029 | 2027-01-01 | 2029-12-31 | If executed as anticipated, this multi-year power/build program could represent a material multi-year demand stream for Broadcom systems/components; if it under‑delivers or is delayed, expected medium-term revenue and visibility into large hyperscaler demand would be impaired. | Ticker | AVGO (ticker) | AVGO_2a830b86 | 2025-12-11 | earnings_transcript | ||||||||||||||
| Broadcom management stated line-of-sight to AI revenue from chips, just chips, exceeding $100 billion in 2027. | in excess of $100 billion in 2027 | 2027-01-01 | 2027-12-31 | If realized, it represents a multi-year, high-scale AI compute monetization that could meaningfully lift revenue and inform valuation, though it may pressure margins if AI mix grows faster than mix shifts in other segments. | Ticker | AVGO (ticker) | AVGO_bfe6a053 | 2026-03-04 | earnings_transcript | ||||||||||||||
| OpenAI deploying in volume their first-generation XPU in 2027 at over 1 gigawatt of compute capacity. | in 2027 | 2027-01-01 | 2027-12-31 | OpenAI demand is a key driver for Broadcom's XPUs; a meaningful ramp would support backlog realization and top-line growth, though execution risk and timing remain uncertain. | Ticker | AVGO (ticker) | AVGO_6fd62a9a | 2026-03-04 | earnings_transcript | ||||||||||||||
| Next-generation Tomahawk 7 switch featuring 2x the performance. | in 2027 | 2027-01-01 | 2027-12-31 | Higher bandwidth networking leadership supports AI compute expansion and could accelerate share gains in AI networking. | Ticker | AVGO (ticker) | AVGO_ed84ae9b | 2026-03-04 | earnings_transcript | ||||||||||||||
| Lumentum to become the #1 supplier of Optical Circuit Switches (OCS). | sometime in early '27 that we cross over and be the #1 supplier and actually have momentum from there in terms of our OCS shipments. | 2027-01-01 | 2027-03-31 | Achieving market leadership in OCS signifies strong execution and competitive advantage in a high-growth, strategic product area, driving increased revenue and market share for Lumentum. | Ticker | LITE (ticker) | LITE_7743904f | 2026-08-11 | earnings_transcript | ||||||||||||||
| Lumentum to achieve its first triple-digit revenue quarter for ultra-high-powered lasers. | the third quarter is when you'd see the first triple digit quarter for ultra-high powered lasers. | 2027-01-01 | 2027-03-31 | This milestone indicates a significant ramp-up in demand and shipments for critical components in AI infrastructure, driving substantial revenue growth for Lumentum. | Ticker | LITE (ticker) | LITE_704d1f6d | 2026-08-11 | earnings_transcript | ||||||||||||||
| Lumentum to release new financial targets. | We'll come out with some new financial targets, probably at the next OFC. | 2027-03-01 | 2027-03-31 | The release of new financial targets would reflect Lumentum's updated outlook on stronger demand and improved margins, potentially leading to a re-rating of the stock. | Ticker | LITE (ticker) | LITE_8cbb5e02 | 2026-08-11 | earnings_transcript | ||||||||||||||
| Next-step upgrade to 400G SerDes in 2028. | in 2028 | 2028-01-01 | 2028-12-31 | 400G SerDes upgrade enables higher bandwidth within data-center clusters; could influence ASPs, mix and gross margins during the transition period. | Ticker | AVGO (ticker) | AVGO_c74214d3 | 2026-03-04 | earnings_transcript |
NotesTranscript Summary
| Date | Type | Comment | Detail | Sentiment | Tickers |
|---|---|---|---|---|---|
| 2026-03-14 | group_thesis | This transcript highlights the theme's evolution, shifting focus from core optical transceiver providers to 'picks and shovels' in the photonics supply chain. It emphasizes the accelerating necessity of Co-Packaged Optics (CPO) and advanced photonic components due to relentless AI data center demands. New opportunities are identified in upstream materials, specialized equipment, and packaging solutions, with several companies seen as undervalued despite significant AI-driven growth vectors. | Transcript Summary | Bullish | HIMX US, AIXA GR, SMHN GR, SOI FP, NOK US, STM US, POET US |
| 2026-08-13 | theme_update | The theme is strongly validated by accelerating demand for 800G/1.6T transceivers, CPO, and OCS, driven by AI's insatiable bandwidth needs. Companies like Coherent, Lumentum, and Marvell report record bookings and capacity expansions (e.g., 6-inch InP) to address persistent supply constraints. NVIDIA partnerships and emerging "scale-across" AI network architectures further underscore the critical, expanding role of advanced optical interconnects. | Earnings Summary | Bullish | MRVL, COHR, LITE, AAOI, AVGO |
| 2026-08-26 | theme_update | The theme is strongly validated by accelerating AI-driven demand for 800G/1.6T transceivers, CPO, and OCS, leading to record bookings and revenue across providers. While supply constraints persist for key components like Indium Phosphide, aggressive capacity expansions are underway. CPO and OCS are significantly expanding the TAM, with NVIDIA partnerships underscoring the shift to advanced photonic interconnects. However, high valuations are causing market sensitivity despite robust fundamentals. | Market Commentary | Bullish | MRVL, COHR, LITE, AAOI, AVGO |