Short-term sentiment adjustment for optical interconnect; mid-term industry trend is clear.

 Overall, the GTC conference did not fall short of expectations.

Instead, NVIDIA gave a high growth outlook for 2027, and U.S. stocks also surged during the session. This is the best proof! The reasons for the decline in optical communication are, on one hand, some funds chose to cash out after the GTC conference; on the other hand, due to excessive hype from Taiwanese media and others, market expectations for CPO were too high before the GTC conference, which is even beneficial for pluggable modules. However, the optical communication sector experienced a widespread and indiscriminate decline, a misjudgment! The long-term technology development roadmap has not changed, and the increase in penetration of optical solutions in AI networks remains a major trend.

Thin-film lithium niobate: the sector most severely misjudged. 3.2T optical modules are currently the mainstream solution with certainty, and orders are expected by 2027. At the same time, there is application space in Sc­a­le up (CPO/NPO) + Sc­a­le ac­r­o­ss (DCI), with significant room for imagination.

There is a lot of noise in the market, such as those who claim NVIDIA is wishfully pushing CPO, those who confuse concepts and push pluggable optical modules with ulterior motives, and those who are lurking to cash out their chips. The end of the GTC conference marks the beginning of the CPO track, for the following reasons: industry chain research indicates over 200,000 CPO switch shipments next year; Jensen Huang is very certain about CPO entering the cabinet for sc­a­l­e­up, and did not mention pluggable optical modules entering the cabinet; NV/TSMC's CPO equipment supplier Radish has over 100 orders in hand. "CPO is the optical module of 2023." Today's adjustment is to build momentum for the next charge.

My operation: A might still get killed tomorrow, just buy a little. Not much margin left, haha.

The following parts: not all bought, I only bought one, follow my heart.

Equipment: Optical engine: FAU: Packaging: Universal Scientific Industrial (Shanghai) Co., Ltd. (ASE acquisition, CPO dark horse)$Direxion Daily MU Bull 2X Shares(MUU.US)$Vertiv(VRT.US)$Tradr 2X Long Lite Daily ETF(LITX.US)$Micron Tech(MU.US)