Guotai Haitong has released a research report stating that the performance outlook for optical interconnect remains broadly robust, with attention focused on the 0-to-1 transformation opportunities in CPO/OIO. The fiber optic industry exhibits a clear upward price trend, while hollow-core fiber presents new incremental potential. The industry's allocation weighting has increased, and valuations have reached the upper half of their historical range, reflecting upward expectations for the sector driven by the AI industry chain. AI is propelling network upgrades, overseas demand is strong, and leading domestic companies are fully benefiting from the global infrastructure wave. The new generation of domestic computing infrastructure is commencing, ushering in a new cycle for the fully localized supply chain. New connection technologies are also expected to reach an industry inflection point around 2026, presenting more investment opportunities. Driving Network Upgrades – AI's large model training and applications are increasing the demand for communication capabilities, accelerating network innovation and the adoption of new technologies. Guotai Haitong's primary views are as follows: The performance outlook for optical interconnect is generally strong, with differentiation offering insights for 2026. The appreciation of the Renminbi has an overall impact on provisioning and exchange rates for the optical interconnect segment, which primarily serves overseas export markets. Looking towards 2026-2027, the market for pluggable optics continues to see rising prosperity; however, new packaging and material technologies are beginning their 0-to-1 implementation, making marginal change opportunities worth monitoring. Focus on the 0-to-1 transformation opportunities in CPO/OIO. LightCounting forecasts that shipments of CPO technology will commence with 800G and 1.6T ports, beginning scaled volume production between 2026 and 2027, primarily for short-reach data center scenarios among hyperscale cloud service providers. By 2029, the penetration rate for 800G (100G per lane) CPO is projected to be 2.9%, for 1.6T (200G per lane) CPO 9.5%, and for 3.2T (400G per lane) CPO is expected to reach as high as 50.6%. The fiber optic industry's price increase trend is clear, with hollow-core fiber bringing new increments. Recent spot fiber prices have continued to rise, attributed by the firm to upcoming centralized procurement by telecom and mobile operators, coupled with heightened pre-Chinese New Year inventory restocking demand, suggesting prices will continue their upward trajectory. Against this backdrop, major domestic clients are also expected to accept the price hikes, providing confirmation amidst sector volatility. Key industry news: Corning secures a $6 billion long-term supply agreement with Meta; Nvidia makes an additional $2 billion investment in CoreWeave; Microsoft unveils its second-generation in-house AI chip, Maia 200; the personal AI assistant ClawdBot sweeps the globe; Microsoft and Meta release their latest financial reports. Risk warnings: Commercialization of new technologies may be slower than expected; CSP capital expenditures might fall short of expectations.