Soochow Securities·2026-02-08 05:59Investment Rating - The report maintains an "Overweight" rating for the communication industry, indicating a positive outlook for the sector over the next six months [1][8]. Core Insights - The demand for optical modules is expected to increase significantly, driven by major cloud service providers (CSPs) like Amazon, Google, Microsoft, and Meta, which are projected to spend a total of $660 billion on capital expenditures in 2026, a 60% year-on-year increase, primarily focused on AI computing infrastructure [5]. - The CPO (Co-Packaged Optics) industry is accelerating its progress, with Lumentum announcing substantial orders for high-power lasers, and Nvidia's partners set to deploy CPO systems in 2026, indicating a robust market expansion [5]. - NPO (Near-Package Optics) technology is gaining traction due to its cost-effectiveness and flexibility, making it a preferred choice among CSP clients, which could enhance the long-term growth potential of related companies [5]. - The report emphasizes that multiple optical interconnection solutions will coexist in the long term, suggesting that investors should focus on different investment priorities based on market cycles and technological advancements [5]. Summary by Sections Optical Modules - The future demand for optical modules is expected to remain strong, with a competitive edge due to the ongoing evolution of products like 800G, 1.6T, and 3.2T modules, leading to quarterly revenue growth for related companies [5]. CPO Industry - The CPO sector is witnessing accelerated industrialization, with significant orders expected to materialize in 2026 and 2027, indicating a clear commercial value and expanding market space [5]. NPO Technology - NPO technology is recognized for its unique advantages, including cost and power efficiency, and is anticipated to become a long-term technical choice for CSPs, suggesting a strong growth trajectory for companies involved in this space [5]. Investment Focus - The report recommends focusing on three core investment themes: 1. Large-scale optical modules benefiting from high-speed interconnect demand, with key recommendations for companies like Zhongji Xuchuang and attention to new opportunities in the second-tier market [5]. 2. Smaller optical modules with increased customer demand, highlighting potential breakthroughs for companies like LianTe Technology and HuiLv Ecology [5]. 3. New optical technologies that are emerging, with a focus on companies like Tianfu Communication and potential opportunities in the technology upgrade cycle [5].