CPO stocks surged once again! On February 3rd, during the early A-share trading session, the ChiNext Index briefly surged by 2%, with CPO concept stocks leading the gains. Tianfu Communication rose over 10%, while Sunsea IS and Zhongji Innolight advanced more than 3%. ZS Technology hit the 20% daily limit-up just eight minutes after the market opened.
A brokerage research report indicates that, according to industry surveys, NVIDIA's CPO switches are expected to begin shipments, with an estimated volume of 10,000 units. The Spectrum-5 is projected to ramp up first, followed by potential small-scale shipments of the Spectrum-6 and Quantum CPO switches starting in the second quarter. If NVIDIA introduces CPO technology in scale-up networks by 2027, the application scenarios for optical interconnects are expected to expand further.
On another front, has the broader market already stabilized, creating a favorable environment for thematic stocks to perform? The positive momentum for CPO continues to build. According to a January 30th report from Socionext, LightCounting released a latest report pointing out that AI development is driving rapid growth in the optical transceiver and Co-Packaged Optics (CPO) market. The market size is forecasted to reach $16.5 billion in 2025 and surge to $26 billion in 2026, representing a high annual growth rate of 60%. Although supply chain shortages are easing, fervent capital expenditure from top cloud companies is providing support for the market. Meta and Oracle plan to double their capital expenditures by 2026, while other companies have yet to update their 2026 spending plans.
A securities research institution stated that, based on current assumptions, optical component sales to the top five cloud companies will account for 3.1% of their capital expenditures in 2026 (up from 2.7% in 2025), and are projected to increase to 4.1% by 2031. The rise in optical connectivity spending can be attributed to new applications, such as scale-up networks, and the rapid growth in GPU bandwidth for both scale-out and scale-up connections. The adoption of CPO in scale-up connections may exceed forecasts and lead to stronger market growth between 2028 and 2031.
Additionally, NVIDIA is hosting a webinar on co-packaged silicon photonic switches on February 3rd. According to NVIDIA's description, hyperscale AI is redefining what modern data centers must deliver. As next-generation AI workloads evolve towards massive model scales, real-time inference, and interconnected AI factories across regions, infrastructure must evolve to achieve unprecedented scale, connectivity, and energy efficiency. This webinar focuses on how data centers can achieve supercomputing-level performance using NVIDIA's photonic switches, NVLink, and Spectrum-X Ethernet in the context of increasingly large AI models and real-time inference.
Another brokerage believes that 2026 will be the first year of mass production for CPO. The core advantages of CPO are reducing Total Cost of Ownership (TCO) and power consumption. Taking the GB300 NVL72 cluster as an example, in extreme cases, adopting CPO technology can reduce transceiver power consumption in a three-layer network by 84% and total network power consumption by 23%. According to industry surveys, NVIDIA's CPO switches are expected to ship, with an estimated volume of 10,000 units. The Spectrum-5 is set to lead the volume increase, followed by potential small-scale shipments of the Spectrum-6 and Quantum CPO switches starting in Q2. If NVIDIA introduces CPO technology in scale-up networks by 2027, the application scenarios for optical interconnects will be further expanded.
Has the broader market already stabilized? So, is the broader market conducive to thematic plays? Has the recent liquidity crisis been resolved? Analysts believe that, in the short term, while the momentum of declining external liquidity has temporarily stabilized, geopolitical uncertainties remain. On the other hand, considering the approaching long holiday, sporadic deleveraging may still occur in the domestic market. Therefore, the market is likely to exhibit a volatile pattern.
First, from last night to this morning, precious metals rebounded strongly, the US leveraged loan index also showed slight stabilization, and cryptocurrencies bounced back. However, it is noteworthy that it is difficult to conclude whether this represents a true reversal, as the rebound in the leveraged loan index is minimal, and the cryptocurrency rebound is also modest, with Bitcoin still trading below $79,000. It is hard to say that the liquidity situation has completely turned around.
From a geopolitical perspective, uncertainties in the Middle East persist. Donald Trump stated that the US is in dialogue with Iran, adding, "It would be great if we could make some kind of a deal. If we can't, something bad might happen." He reiterated military threats towards Iran, repeating claims about the US sending a "massive" fleet to Iran, "even bigger than the one in Venezuela."
Second, domestically, the prevailing market expectation is that the market may gradually calm down during the final week before the Spring Festival holiday. However, although the current trading volume and margin balance levels in the A-share market have declined from previous highs, they remain relatively elevated. As the long holiday approaches, these two key indicators are expected to trend towards convergence. Wind data statistics show that the margin purchase amount for the Shanghai and Shenzhen markets was 241.866 billion yuan on the day, compared to 266.979 billion yuan the previous trading day. The margin repayment amount was 247.876 billion yuan, down from 290.522 billion yuan the previous day. The volume of securities lending was 182 million shares, compared to 95.3601 million shares the previous session. Against this backdrop, market volatility is also expected to converge.
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