Optical component companies Lumentum (LITE.US) and Coherent (COHR.US) saw their stock prices drop during Tuesday's premarket trading. This movement followed NVIDIA (NVDA.US) CEO Jensen Huang's reaffirmation that the company's server racks will utilize copper technology. At the time of reporting, Lumentum was down over 3% premarket, while Coherent fell nearly 4%. In contrast, active cable manufacturer Credo Technology (CRDO.US) bucked the trend, rising nearly 3%.

During a two-and-a-half-hour GTC keynote covering multiple topics, Huang stated that NVIDIA will concurrently advance both copper technology and co-packaged optics (CPO) for its upcoming Vera Rubin Ultra and Feynman product lines. J.P. Morgan analyst Harlan Sur noted that NVIDIA's dual-track strategy aligns with his expectations, pointing out that market enthusiasm for CPO technology is "ahead of the readiness of the downstream supply chain."

In a report to clients, Sur wrote: "For the current Vera Rubin generation, the Oberon rack uses copper interconnects for scaling to NVL72 size, while optical interconnect technology is used for scaling up to NVL576 size. The Spectrum-6 SPX co-packaged optics Ethernet switch is in full production. Developed jointly with TSMC, management claims it offers 5 times better optical power efficiency and 10 times greater resiliency compared to traditional pluggable transceivers."

"For the Rubin Ultra (expected in 2027), the Kyber rack architecture employs vertical compute trays connected via a central backplane and NVLink copper interconnects (supporting up to 144 GPUs). A CPO-based NVLink switch solution for inter-rack connectivity was also demonstrated. Management indicated that both designs will continue to be developed in parallel."

"For Feynman (expected in 2028), NVIDIA will explicitly offer Kyber products with both copper interconnect and CPO interconnect scale-out options, alongside the introduction of Spectrum-7 (204T, CPO) for horizontal scaling."