Optical communication stocks opened higher collectively in Hong Kong trading. As of the time of writing, Yangtze Optical Fibre and Cable (06869) rose 5.42% to HK$17.50. Cambridge Technology (06166) increased by 5.19% to HK$7.70. Hongteng Precision (06088) advanced 5.05% to HK$6.45. Convergence Technology (01729) gained 2.31% to HK$1.95.
The surge follows news that NVIDIA has entered into multi-year strategic partnerships with two leading companies in the optical communication sector, Lumentum and Coherent. NVIDIA will invest $2 billion in each company, totaling $4 billion to enhance research, development, and manufacturing of advanced optical technologies. This initiative aims to accelerate the large-scale construction of next-generation AI infrastructure and strengthen NVIDIA's global leadership in AI and accelerated computing.
Both partnerships are non-exclusive agreements. Each includes NVIDIA's commitment to purchase billions of dollars worth of products, along with future access to production capacity and priority rights for advanced lasers, optical networking products, and related components.
China Galaxy Securities noted that the optical module sector remains in an upward trend. Overseas demand is currently strong, with major cloud providers' capital expenditures for 2026 consistently exceeding expectations. Improvements in GPU performance are driving a clear upgrade trend in overseas optical module speeds. The adoption of high-speed, high-value optical modules is expected to accelerate. Additionally, the long-term trend of replacing copper with optical technology in scale-up applications is becoming more defined, which will further increase the usage and demand for optical modules.
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