Recent investment bank research indicates that network and optical interconnects within AI computing infrastructure remain critical bottlenecks for system expansion, with related manufacturers expected to continue benefiting from revenue and profit growth. Evercore stated that its channel survey targeting AI engineers yields positive implications for NVIDIA (NVDA.US), Broadcom (AVGO.US), Astera Labs (ALAB.US), Marvell Technology (MRVL.US), and MACOM Technology Solutions (MTSI.US), reiterating "Outperform" ratings for these companies. An analyst team led by Mark Lipacis at Evercore noted that surveys involving 20 AI engineers confirmed their assessment that connectivity remains a core constraint for AI systems, both in terms of supply and speed. Companies capable of delivering solutions at scale are positioned to benefit from demand tailwinds in the foreseeable future. While strategies and supply chains differ among hyperscale cloud providers, overall survey results are favorable for the mentioned companies.
Regarding NVIDIA, analysts indicated the company is advancing its co-packaged optics version of the NVLink switch aligned with the Rubin Ultra release schedule, targeting the second half of 2027, though some industry observers believe a delay to 2028 is more likely. The team acknowledges potential for PCIe and Ethernet to gain share from NVLink but expects NVLink to maintain a premium positioning due to superior performance. NVIDIA has developed its own 1.6T (terabit per second) digital signal processor (DSP), projected to meet approximately 50% of internal demand, with Broadcom supplying the remainder.
For Broadcom, Evercore anticipates its electro-absorption modulated laser (EML) production capacity will increase from approximately 43-44 million units in 2025 to 50 million units in 2026. Continuous wave (CW) laser capacity is expected to expand from 15-16 million units in 2025 to 30 million units in 2026. Analysts added that non-Broadcom switches face challenges in supporting linear-drive pluggable optics (LPO), while the company's 1.6T DSP is considered an industry benchmark. Meta Platforms' 1.6T DSP demand is expected to be largely fulfilled by Broadcom.
Concerning Astera Labs, Evercore stated that Amazon's (AMZN.US) Trainium-3 is projected to incorporate Astera's Scorpio X switch in two of its three SKUs, with the third SKU utilizing a switch-less design. Analysts believe Astera Labs is increasingly being perceived as an established supplier rather than a startup.
For Marvell Technology, the team indicated that Google's (GOOG.US, GOOGL.US) 1.6T DSP demand is expected to be entirely supplied by Marvell. In the 800G DSP segment, Marvell holds approximately 70% market share, with Broadcom accounting for the remaining 30%. Marvell is considered to have advantages in 1.6T transimpedance amplifier (TIA) performance and new packaging architectures. Additionally, analysts noted that Celestial AI is viewed as part of Marvell's broader strategy to compete more effectively with Broadcom by building comprehensive ASIC full-stack design collaboration capabilities.
Regarding MACOM Technology Solutions, channel information indicates the company continues to increase its market share in 1.6T photodetectors (PD). The unit price for 1.6T PD is approximately $2.50-$3.00, significantly higher than the $0.50-$0.60 for 800G PD. Evercore expects MACOM could capture 50-60% of the 1.6T module market, with the remaining share distributed among Broadcom, GCS, and SiFotonics.
Comments