The global push to build AI data centers is shifting market focus beyond just chips. Fiber optic cables, essential for high-speed connections between vast numbers of servers, are emerging as a new bottleneck in the supply chain. According to a report, the AI data center construction wave is fueling a sharp increase in global demand for fiber optics. Major Chinese fiber optic manufacturers have order books filled through early 2027. Industry leaders have reportedly stated that their production lines are already operating at full capacity, with delivery times for some products extending from weeks to several months. Industry insiders estimate that AI data centers require approximately 36 times more fiber optic cable than traditional CPU server racks. Data from a commodity consultancy indicates that data centers accounted for less than 5% of global fiber demand in 2024. However, with surging related demand, this share is projected to rise to 30% by 2027. Earlier this month, Corning and NVIDIA announced a long-term partnership. NVIDIA will invest $5 billion to obtain an equity call option in Corning, while Corning plans to build three new advanced manufacturing plants dedicated to NVIDIA. The company aims to increase its U.S. optical connectivity manufacturing capacity tenfold and boost fiber production by over 50%. Both companies stated that modern AI workloads, requiring thousands of NVIDIA GPUs, are creating unprecedented demand for high-performance fiber optics, connectors, and photonic components. Related Hong Kong-listed companies in the optical communication industry chain include YOFC (06869), Cambridge Industries (06166), Foxconn Interconnect Technology (06088), Wai Kee Holdings (01729), ZJ Group (01300), and Southern Communication (01617).
**Market Outlook** WTI crude oil futures settled at $99.08 per barrel, down 4.87%. U.S. stocks closed higher overnight. The Dow Jones Industrial Average rose 645.47 points, or 1.31%, to close at 50,009.35. The S&P 500 gained 79.36 points, or 1.08%, to finish at 7,432.97. The Nasdaq Composite increased by 399.65 points, or 1.54%, to end at 26,270.36. Major tech stocks broadly advanced. U.S. CPU-related stocks performed strongly, with ARM surging over 15%, AMD rising over 8%, and Intel gaining over 7%. U.S. bank stocks moved higher, with Deutsche Bank up over 6%, Goldman Sachs and Barclays up over 5%, and Morgan Stanley and Citigroup up over 4%. Space-related stocks were mostly higher. The Nasdaq Golden Dragon China Index fell 0.44%. Hong Kong's Hang Seng Index ADRs indicated a higher open. WTI crude oil futures for the front-month contract fell $5.07 to settle at $99.08 per barrel, a decline of 4.87%. COMEX gold futures for the front-month contract rose $35.00, or 0.78%, to $4,546.2 per ounce.
**Key Developments** NVIDIA reported Q1 revenue for fiscal 2027 of $81.6 billion, an 85% increase year-over-year, surpassing market expectations. The company announced a new $80 billion share repurchase authorization. SpaceX has filed an S-1 registration statement with the SEC for an IPO under the ticker SPCX. SEC filings show SpaceX had Q1 revenue of $4.694 billion with an operating loss of $1.943 billion. Its AI division revenue was $818 million for the quarter. Reports indicate OpenAI is preparing to confidentially file a draft IPO prospectus as early as this Friday, May 22nd, potentially setting the stage for one of the largest listings in history. Sources say OpenAI is working with several investment banks. Hong Kong China Travel (00308) announced plans to spin off its Hong Kong and Macau cultural tourism business via a distribution in specie and list it on the Main Board of the Stock Exchange by way of introduction. The spin-off proposal has been submitted to and confirmed by the Exchange. C-Mer Eye Care (03309) announced its intention to invest approximately 113 million yuan to acquire a stake in Zhongyin Technology, entering the ophthalmic gene therapy sector. The investment is for about 10.23% of the enlarged issued share capital. Kanzhun Limited (02076) reported Q1 2026 financial results. Revenue was 2.069 billion yuan, up 7.57% year-over-year. Net profit attributable to ordinary shareholders was 1.157 billion yuan, a significant increase of 123.24% year-over-year. Latest Hong Kong Exchange data shows that on May 15th, JPMorgan Chase increased its holding in Alibaba Health Information Technology (00241) by approximately 57.04 million shares at an average price of about HK$4.3049 per share. On May 18th, Ping An Insurance (Group) Company of China increased its holding in China Life Insurance (02628) by 56.75 million shares at an average price of about HK$29.5956 per share. Sany Heavy Equipment International (00631) released Q1 2026 results. Revenue reached 6.651 billion yuan, a 13.2% year-over-year increase. However, profit attributable to owners of the parent was 509 million yuan, down 19.8% year-over-year. GDS Holdings (09698) announced Q1 2026 results. Net revenue was 3.367 billion yuan, up 23.6% year-over-year. Net profit was 2.652 billion yuan, soaring 247.1% year-over-year. The company reaffirmed its full-year 2026 guidance. **Stock Focus: Chongqing Machinery & Electric (02722): Cummins Raises Full-Year Revenue Guidance** Cummins recently released its Q1 results, with total revenue of $8.4 billion, slightly above market expectations, and net profit of $654 million. The company raised its full-year 2026 revenue guidance to a range of $36.36 billion to $37.37 billion, implying year-over-year growth of 8% to 11%, primarily driven by stronger-than-expected demand in key markets like data center power generation. Public information shows that Chongqing Machinery & Electric holds a 50% stake in Chongqing Cummins, which is Cummins' sole large-horsepower engine production base in China. Analysts note that shipments of the Chongqing Cummins Q60 engine are expected to double in 2026, with investment income likely to increase further from the 2025 base.
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