[GF Communications] Optical Interconnect Fundamentals Diverge Sharply from Stock Prices; We Firmly Favor Leaders

English summary

Recently, overseas AI hardware stocks have continued to decline, but from our research perspective, optical interconnect fundamentals are indeed strengthening. Specifically: 1. 2028 demand is becoming clearer, confirming long-term growth. Leading players such as Innolight and Eoptolink report multiple customers signing long-term supply MOUs, locking materials and capacity for years—a first in optical module history. #Several leading optical module makers say 2028 demand is already very clear# 2. 2028 demand maintains very high growth, even accelerating. Leaders see significant ramps in 2.4T, 3.2T, and NPO in 2028, with demand growth in 2027/2028 accelerating—i.e., #the second derivative of demand is positive from 2026-2028# 3. Material gaps are narrowing. Eoptolink's 2Q earnings preview proves leaders' material procurement capability. #The material gap for 2027-2028 will likely narrow further (still in shortage), benefiting leaders with stronger procurement# 4. Competitive landscape and pricing. ...