NVIDIA recently unveiled a switch equipped with silicon photonics-based CPO technology, which has already been deployed in Lambda's production-grade GPU clusters, achieving a 3.5x improvement in power efficiency. Meta and Microsoft have also joined the initial deployment cohort. However, prior to this, a bearish report from SemiAnalysis revised down NVIDIA's CPO shipment forecasts and stated that large-scale shipments of 800V power supplies would be delayed until after 2028, causing a sharp decline in U.S. listed optical communications stocks.
Just days after the bearish report was released, $NVIDIA (NVDA.US)$ it responded with a hardware demonstration.
NVIDIA recently posted a video on X showcasing its Quantum-X InfiniBand Photonics Q3450-LD switch, which incorporates its silicon photonics CPO technology. The device has already been deployed in Lambda’s production-grade GPU clusters, delivering a 3.5x improvement in power efficiency and a 10x increase in network resilience. CoreWeave, Meta, Microsoft, and Oracle Cloud Infrastructure have also joined the initial deployment cohort.
However, just prior to this development, markets were rattled by a bearish report questioning NVIDIA’s CPO prospects. On June 9, SemiAnalysis downgraded its shipment forecasts for NVIDIA’s CPO switches and stated that mass adoption of its native 800V DC power solution would be delayed until after 2028, triggering a sharp sell-off in the U.S. optical communications sector. Currently, divergent market expectations regarding NVIDIA-led CPO and 800V DC power technologies remain the key variables influencing the trajectory of the AI infrastructure segment.
U.S.-listed optical communications stocks rebounded in early trading, $Credo Technology (CRDO.US)$ up over 9%, $Astera Labs (ALAB.US)$ Surging over 8%, $Marvell Technology (MRVL.US)$ with an increase of over 4%. $Coherent (COHR.US)$ up nearly 4%, $Lumentum (LITE.US)$ 、 $POET Technologies (POET.US)$ 、 $Corning (GLW.US)$ Rose more than 3%.
CPO Hardware Deployment: From Slides to Production
NVIDIA’s CPO switch technology has moved beyond the conceptual stage into actual mass production and deployment. The Q3450-LD switch integrates optical components directly within the package, replacing traditional pluggable transceivers and supporting up to 115.2 Tbps of full-duplex bandwidth.
Power efficiency is a core selling point of this technology. While standard switches consume approximately 7 kilowatts, the CPO version requires only about 3.95 kilowatts—saving roughly 3.05 kilowatts per unit. Lambda encapsulates this value proposition as “more tokens per watt.” In large-scale AI training environments, the 10x improvement in network resilience is equally critical: a single network disruption could force a task spanning thousands of GPUs to restart from scratch, incurring substantial costs.
Lambda had already announced in November 2025 the successful integration of NVIDIA’s silicon photonics networking solution; the public debut of the Q3450-LD now fulfills that early commitment. NVIDIA positions its CPO switch as essential infrastructure for running 'agentic AI workloads' within its 'AI factories.'
SemiAnalysis and Morgan Stanley: Bearish Consensus on CPO, Divergence on 800V
Significant expectation gaps exist in the market regarding the two technological pathways—CPO and 800V.
On CPO, Morgan Stanley and SemiAnalysis largely agree. Morgan Stanley forecasts global optical engine shipments in 2027 to reach only 6–7 million units, far below market expectations of 20–30 million units. The primary bottleneck lies in manufacturing: Taiwan Semiconductor’s capacity expansion for photonic integrated circuits remains slow, with system-in-package chip yields at just 50%–60%, and downstream assembly yields even lower, ranging from 20% to 50%. The period from 2026 to 2028 will be a transitional phase featuring coexistence among pluggable optical modules, CPO, and copper interconnect solutions.
On the 800V power architecture, Morgan Stanley holds a position diametrically opposed to that of SemiAnalysis. According to Morgan Stanley, NVIDIA stated that 800V power racks will be production-ready by Q3 2026, which does not directly contradict SemiAnalysis’s claim that 'mass shipments will be delayed until after 2028'—as 'production readiness' and 'mass volume ramp-up' represent distinct milestones. Delta Electronics is expected to become the first manufacturer to achieve mass production, with initial deliveries of its products to North American hyperscale cloud service providers anticipated in Q4 2026, albeit at limited scale initially.