Guangfa: Nvidia CPO releases faster than expected Lumentum (LITE.US) and Semtech (SMTC.US) are expected to benefit

Zhitong Finance App learned that Guangfa Securities said that Nvidia (NVDA.US)'s horizontal expansion of co-packaged optics (CPO) is progressing faster than expected, which should benefit supplier Lumentum (LITE.US). Guangfa maintained a “buy” rating for Lumentum.

Alicia Xia, an analyst at GF Securities, said in an investor report on Tuesday, “To support this volume, TSM.US has expanded its CPO testing/testing capacity, particularly increasing the capacity for testing 2/3 equipment.” “Key components such as FAU are also progressing well, thanks to improvements in multi-plug yield. At the system level, we believe the main component suppliers are in place, making cleanroom-level system integration possible from the beginning of September. We now expect Nvidia's CPO switch shipments of 4q26/1q27/2q27/2027 to reach 15k/16k/30k/100k respectively.”

According to widely published data, Lumentum's estimated revenue from CPO and near-package optics (NPO) will accelerate significantly year-on-year between 2027 and 2028. In 2027, Lumentum is expected to generate $427 million in CPO laser revenue and $501 million in NPO laser revenue. By 2028, this forecast will expand to CPO of $750 million and NPO of $2.55 billion.

Xia stated, “Large-scale CPO/NPO systems based on NVL576 are expected to be implemented in 2H27E. Each NVSwitch tray is equipped with two exchange boards, each board is equipped with four ASICs, and is paired with four 3.2T optical engines (OE) /ASICs.”

“We reaffirm our view that CPO (QM5 + 4 OE) and NPO (QM5 + 4 OE, socket type) are progressing in parallel; given the maturity of NPO, our view on achieving full NPO adoption when NVL576 was released is in line with general market expectations. The next thing to watch for is Feynman. Our supply chain research shows that it is also being developed in both CPO and NPO variants; package side visibility indicates that CPO (QM6 with six 6.4T OE) is still progressing as planned.”

GF also gave Semtech (SMTC.US) a “buy” rating, citing its role in the horizontal expansion of the NPO, which is expected to significantly improve its earnings per share (EPS) data by 2028. According to forecasts, after contributing $0.47 in 2027, the business will contribute $3.03 to its EPS by 2028.