AI-driven enthusiasm for 800G transceiver-maker stocks might be overblown: LightCounting

June 22, 2023
Investors might want to slow their roll if they think NVIDIA and other companies like it will need mountains of 800G transceivers anytime soon, LightCounting warns.

The analysts at LightCounting have noticed that the same AI-driven wind that has blown the stock of companies such as NVIDIA to new heights also has provided a strong boost to the shares of Chinese 800G transceiver manufacturers. However, such investors might want to slow their roll if they think NVIDIA and other companies like it will need mountains of 800G transceivers anytime soon.

Stock prices for multiple Chinese optical component and module companies have risen 300% to 400% so far this year; the figure above illustrates the stock performance of two such suppliers, Innolight and Eoptolink (alongside that of NVIDIA). The assumption of investors seems to be that NVIDIA’s latest system design will require 800G transceivers and active optical cables (AOCs), and such module suppliers are in prime position to supply them.

However, LightCounting notes that NVIDIA won’t be ready to purchase such devices until next year, and there’s no telling now which transceivers will be used and which suppliers will be qualified to deliver them. The market research firm acknowledges that its upcoming quarterly market report, to be released in July 2023, will be more optimistic about 800G transceiver demand than the one it published this past March. Nevertheless, LightCounting says its figures will show that expectations among financial analysts for 5 million or 8 million unit shipments of 800G devices next year “are too aggressive.”

“Many investors made money on NVIDIA’s stock this year and they are looking for more finds across the supply chain,” LightCounting stated in a note touting the upcoming market report. “Chinese optical companies are the latest favorites but how long this is going to last it remains to be seen.”

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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.

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