NVIDIA has finally played its optical card with the mass production of CPO. In the early hours of August 14, 2026, NVIDIA officially announced that its Spectrum-X Ethernet silicon photonics switches have entered the full-scale mass production phase. This is not a prototype or an engineering test—it is "full-scale mass production." Following the announcement, US optical communications stocks strengthened, and the sentiment quickly spread to the A-share market. Some say this is another far-reaching move by NVIDIA following its CUDA ecosystem. But the more pressing question is—why now? And why optical technology?

On the A-share front, on August 17, the ChiNext Artificial Intelligence ETF Huabao (159363), a high-"optical" play, saw its intraday trading price rise nearly 4%, with market enthusiasm continuing to heat up. When an industry trend shifts from "slogan" to "production capacity," capital's instincts are never late.

NVIDIA Officially Mass-Produces CPO, Moving from Concept to Capacity

First, let's explain why this is significant. CPO, or co-packaged optics, essentially means packaging the "optical engine" and "switching chip" together. Previously, optical modules were pluggable—optical and electrical signals connected outside the switch panel, with data leaving the chip, making a turn, and converting back to light. This process was long-distance, power-hungry, and prone to signal degradation. With CPO, the optical engine is directly soldered next to the switching chip, allowing data to travel at "light speed" through optical fibers, drastically cutting power consumption and latency. For AI clusters with tens of thousands to hundreds of thousands of GPUs, this is not just an enhancement—it is an unavoidable necessity.

NVIDIA announced in the early hours of the 14th that its Spectrum-X Ethernet Photonics switches have entered full mass production, achieving a 4x reduction in laser count, a 5x reduction in power consumption, and a 10x improvement in mean time between failures (MTBF). This industrial inflection point has opened up incremental growth space for the entire optical interconnect chain, transitioning from "thematic expectations" to "order fulfillment."

Who Is "Selling Shovels" in the CPO Era?

Within the CPO optical interconnect value chain, optical components and optical engines are the core incremental segments. Suzhou Tfc Optical Communication Co.,Ltd. (300394), a company deeply rooted in precision optical communication devices, is deeply involved in the supporting optical engine components for CPO. It is well-positioned to directly benefit from component demand during this ramp-up phase, with its earnings elasticity and industry standing continuing to attract market attention.

Two Earnings Reports Reveal the "Optical" Super Cycle

If NVIDIA's announcement is a signal that "the future has arrived," then the latest earnings from overseas optical module giants Lumentum (LITE) and Coherent (COHR) serve as the "performance endorsement" of this trend.

Lumentum (LITE)—Light Source Leader, Expanding into Modules

For FY2026 Q4 (ending June 27): Revenue was $1 billion (up approximately 110% YoY), with non-GAAP EPS of $3.23. The growth engine is clear: 6T cloud modules, OCS optical circuit switches, CPO ultra-high-power lasers, and multi-customer NPO collaborations are all progressing in parallel. The company expects EML laser shipments to grow over 50% YoY in Q4 2026. Lasers/EMLs are the "heart" of optical modules, and Lumentum's data points to one thing—upstream components remain tight.

Coherent (COHR)—The Full-Stack Photonics Integrator

For FY2026 Q4 (ending June 30): Revenue was $5 billion (+34%), with a record full-year revenue of $71.2 billion. In the June quarter, indium phosphide (InP) laser production increased 80% YoY, with plans to double capacity again this quarter. Even a full-stack leader is constrained by InP capacity—which ironically proves that demand far exceeds supply.

The numbers are just the surface. What's truly worth digging into are the industry signals released by both companies during their earnings calls. Piecing these signals together paints an exceptionally clear picture.

Signal One: 1.6T is Succeeding 800G, and the Upgrade Is Accelerating. Lumentum has already started mass production of 1.6T optical modules, expecting adoption rates to accelerate next quarter and continue through 2027. Coherent similarly noted that demand for 1.6T is even stronger than it was three months ago. The shift from 800G to 1.6T is not a matter of "whether to do it"—it's "must be done now."

Signal Two: CPO Is Not Delayed; It Is Being Pulled Forward. Concerns that CPO progress might lag expectations have been disproven by both companies simultaneously. Coherent explicitly stated it has "not seen any delay in CPO demand; in fact, it's being pulled in," with ultra-high-power CW lasers set to contribute revenue starting in the December quarter. Lumentum has already secured its first purchase order for an external laser source (ELS) module, with deliveries scheduled for the second half of 2027. CPO has transitioned from a "long-term narrative" to a "verifiable order" certainty.

Signal Three: NPO Is a Pure Incremental Opportunity. Both companies emphasized that NPO is not a substitute for CPO but rather a new, additional architecture. Coherent noted a significant increase in customer engagement with NPO over the past 3-6 months, while Lumentum indicated that leading CPO customers are evaluating NPO solutions for specific new scenarios. The arrival of NPO is not about splitting the CPO market—it's about expanding the entire optical interconnect pie.

Signal Four: Upstream Component Supply-Demand Imbalance Is Opening Up. EML shipments hit record highs, with the supply-demand gap remaining above 30%. Indium phosphide was previously the only capacity bottleneck; Coherent has now doubled its capacity a quarter ahead of schedule, while Lumentum is aggressively securing additional substrate supply. The tighter the upstream, the more real the downstream—this is not an inventory cycle; it's a structural shortage.

How to Participate in This "Optical" Rally?

With the industry trend shifting from "slogan" to "production capacity," and with NVIDIA, Lumentum, and Coherent all validating the prosperity across the entire supply chain, the next question is—how can ordinary investors share in this high-"optical" rally?

The ChiNext Artificial Intelligence ETF Huabao (159363) focuses on optical module CPO leaders while also covering AI applications. The underlying index includes approximately 40% allocation to "Zhongji Innolight + Eoptolink + Suzhou Tfc Optical Communication," making it a core flag-bearer for AI computing power. Additionally, the ChiNext Artificial Intelligence ETF Huabao (159363) has recently surpassed 7 billion RMB in scale, with average daily trading volume exceeding 1 billion RMB over the past six months, leading all eight ETFs tracking the same index in both scale and liquidity. Off-exchange feeder funds: Class A (023407) and Class C (023408).

On the AI trading front, beyond optical modules and other computing power positioning sectors, investors should also pay close attention to AI applications. Referencing the US SaaS benchmark, Palantir beat expectations in its quarterly report, and the market is assigning a premium to AI application implementation capabilities. The ChiNext AI index aggregates a large number of "software + hardware" combined targets (such as industry-specific vertical applications). Compared to pure hardware communications, these are better positioned to benefit from the dual logic of application-layer earnings delivery and valuation system reshaping.

Currently, with NVIDIA moving CPO from concept to mass production and overseas optical module giants continuously beating expectations, the prosperity of AI optical interconnect is moving from industry consensus to performance validation. The high-"optical" rally may be ushering in yet another new wave of growth.

Data sources: Shanghai and Shenzhen Stock Exchanges, Wind, etc., as of August 17, 2026. Reminder: Market volatility may be significant in the near term, and short-term gains or losses do not predict future performance. Investors are advised to invest rationally based on their own capital situation and risk tolerance, with high attention to position and risk management.

*Institutional view reference: Industrial Securities, "Recent Tech Giants' Earnings Calls: What New AI Narratives?"

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