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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