[GF Communications] Panic Adjustment in Optical Interconnect Near End; Current Prices Significantly Diverge from Fundamentals

English summary

The recent panic selling of optical interconnect hardware companies is not due to any negative news in the industry, but rather a new round of debate among investors about AI's return on investment. The CSPs' recent disclosures have provided reassurance for AI ROI: 1. The three major companies' cloud businesses all grew significantly YoY: Google +82%, Microsoft Azure +43%, AWS +37%, all greatly exceeding expectations, indicating that overseas B2B enterprise AI adoption is rising substantially. 2. This year's capex has not been revised down: Google raised; Microsoft only changed accounting, not revised down; Meta raised; AWS raised this morning to cope with hardware price increases. Multiple CSPs stated that hardware payback periods are much shorter than actual useful life, and continued capex growth is profitable. 3. All stated they will continue to invest heavily in computing hardware in 2027. Current demand far exceeds supply, with unfulfilled orders of $1.7 trillion, +16% QoQ, and growth from non-AI leader model companies accounts for a considerable proportion. Visibility for 2028 demand greatly improved. 4. ...