Recently, the market has been highly discussing the delay of NVDA's B series and its impact on evaluation of optical modules, copper cables, etc. With more information and NVDA's response, investors are gradually forming a consensus, and the market has also reflected this expectation. On the product structure side, the operating income of products worth 10-30 billion yuan is 401/1288/60 million yuan respectively.
According to Zhitong Finance app, gtja securities released a research report stating that the delay of B card has caused heated discussion among investors, and consensus has gradually formed in the discussion, and the market has also reflected this part of expectations. Combined with the North American financial reports, all companies have expressed their determination to invest for the long term, and the change of pace does not change the certainty of demand. Lumen (LUMN.US) received a large order and surged, indicating the prosperity of DCI derived from AI. From the US metropolitan area network demand reflected by Lumen, as well as Microsoft's "interstellar gate" and various ministries' plans to strengthen the computing power and network interconnection between metropolitan area networks in China, it can be seen that the localization cluster investment of AI will eventually require the upgrading and expansion of the overall network, especially the sustained demand for data center interconnection DCI.
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Lumen (LUMN.US) received a large order and increased the prosperity of DCI derived from AI. Lumen is a telecom infrastructure company (serves more than 60 countries in North America, Europe, Latin America, and Asia-Pacific with approximately 450,000 miles of routed optical fiber), responsible for optical network solutions and deployments, including dark fiber, custom fiber routing, and digital services to securely connect to the company's data centers and provide network operations and maintenance services. The company plans to double the mileage of the U.S. metropolitan network in collaboration with Corning over the next five years to meet the needs of artificial intelligence. The company has reportedly garnered $5 billion in new AI product demand and is expected to gain another $7 billion in AI sales opportunities.
From the demand for U.S. metropolitan networks reflected by Lumen, Microsoft's "Stargate," and the plans of various domestic ministries to enhance the computing power and network interconnectivity between metropolitan networks, it can be seen that the localized cluster investment in AI will ultimately require overall network upgrades and expansions, particularly for the continuing DCI demand of data centers. From 2024, there will be a demand for backbone network upgrades among domestic operators, and the relevant demand is expected to become more urgent in 2025 and beyond. Focus on marginal changes such as fiber optic cables, coherent optical modules, optical amplifiers, connectors, and transmission subsystems.
Catalysts: GB200 improved beyond expectations; H-series shipment pace exceeded expectations; additional orders for optical modules.
Investment advice: First, global AI industry resonance pays greater attention to the investment value of optoelectronic interconnection; second, consider the value of stable growth and high stock dividends in state-owned enterprises as well as opportunities for new business transformation; third, look for new connection investment themes that involve low-altitude economy, satellite communications, transport int'l, etc. that have "0-1" changes; and fourth, focus on China's top companies in high-quality tracks such as IoT and submarine cables when economic recovery expectations are high.
Risk warning: Investment in new technology fields such as AI may not be realized as expected. Enterprise competition may intensify and affect profitability.