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Daily Alpha · Substack
· Premarket Alpha · by Buzzberg Research
Optical test demand is argued to survive a CPO delay because near-packaged optics ramps first.
Themes on this desk
Optical test demand
Even if co-packaged optics is delayed and near-packaged optics ships first, optical test demand keeps growing; the June CPO-delay report triggered a sector-wide selloff after an early-year surge on AI interconnect demand.
CPO delay report triggered optical sector selloff, but optical test demand thesis intact
Author argues that even if co-packaged optics (CPO) adoption is delayed and near-packaged optics (NPO) is used first, growth for optical test companies continues. Optical sector stocks surged early in the year on AI optical interconnect demand and CPO expectations, then plunged sector-wide after a research firm published a CPO shipment delay report in early June.
Frames the optical test supply chain as insulated from CPO timing risk, implying the June selloff may have been an overreaction if NPO adoption still drives test demand.
Watch Track whether optical test company revenues/orders keep growing through NPO ramps; a CPO shipment delay that also stalls NPO adoption would invalidate the thesis.
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