Guosheng Securities: Nvidia (NVDA.US) earnings reinforce expectations for AI computing power expansion, focusing on new growth in optical communications under the Scale-Up trend

According to information from Zhitong Finance APP, Guosheng Securities released a research report stating that Nvidia's (NVDA.US) latest financial report has once again reinforced expectations for global AI computing power expansion, driving up the valuation of upstream optical module and optical connectivity-related industry chains. The domestic market is transitioning from "performance realization" to "expectation amplification," forming a secondary rally. Under the Scale-Up trend, the optical communication industry is ushering in a new round of growth opportunities, with technological iteration and demand upgrades jointly propelling the industry to a new stage. The computing power sector remains highly favored, with strong recommendations for leading companies in the computing power industry chain, such as optical module leaders Zhongji Xuchuang (300308.SZ) and Eoptolink (300502.SZ).

The main viewpoints of Guosheng Securities are as follows:

[Nvidia's Financial Report Reinforces AI Expectations, Optical Module Sector Benefits]

Nvidia's financial report has once again reinforced expectations for AI expansion. On August 28, Nvidia announced its FY26Q2 financial report, with revenue reaching $46.7 billion, a year-on-year increase of 56% and a quarter-on-quarter increase of 6%, exceeding the previous guidance of $45 billion. The FY26Q3 revenue guidance is $54 billion (±2%), and after eliminating the impact of H20, revenue returns to high growth.

Data center revenue maintains robust growth. Data center business revenue was $41.1 billion, up 5% quarter-on-quarter and 56% year-on-year, accounting for more than 80% of total revenue. Benefiting from the ramp-up of Blackwell architecture products, Blackwell data center revenue increased by 17% quarter-on-quarter, and as demand for inference and training performance explodes, Blackwell is becoming the core of global AI platforms. The GB300 chip has already begun mass delivery, with full-scale production starting at the end of July and early August, and output is expected to accelerate further in the third quarter.

The importance of networking is highlighted, and optical interconnects are expected to become the key technology supporting Scale-Up. Data center computing revenue was $33.8 billion, up 50% year-on-year but down 1% quarter-on-quarter. Networking revenue was $7.3 billion, up 98% year-on-year and 46% quarter-on-quarter, far exceeding market expectations. In Q2, networking growth significantly outpaced computing, mainly due to the ramp-up of switch trays in NVL72 under Scale-Up, and this rapid growth also proves that the importance of networking is gradually emerging in high-performance demand scenarios. On one hand, AI clusters are becoming increasingly modular and distributed, and inter-GPU connectivity latency has become a bottleneck for performance improvement, making high-performance networking a key optimization variable. On the other hand, in the future, to meet higher-performance cluster demands and avoid GPU idle time waiting for communication, customers may need to deploy matching switch networking solutions synchronously; networking is the prerequisite for unleashing AI system performance. In this context, optical interconnects, as a solution that can break through physical bottlenecks such as bandwidth and energy consumption, will become the key technology supporting Scale-Up architectures in networks in the future.

[China's Overseas Computing Power Industry Chain Shifts from "Performance Realization" to "Expectation Amplification"]

China's overseas computing power industry chain is moving from the "performance realization" stage to the "expectation amplification" stage of a secondary rally. Chinese companies, leveraging their large-scale manufacturing capabilities, are meeting the demands of overseas cloud giants for high-speed optical modules and switching equipment, playing a key role in cutting-edge network technologies (such as 1.6T/CPO/LPO) and network architectures (Scale-up/Scale-out).

Performance realization: Leading optical module companies are delivering high growth. In the first half of 2025, Eoptolink's revenue increased by 282.64% year-on-year, and net profit increased by 355.68% year-on-year; Zhongji Xuchuang's revenue increased by 36.95% year-on-year, and net profit increased by 76.26% year-on-year. In the data link layer field, Chinese ODM/JDM manufacturers produce high-speed data center switches for top global brands.

Expectation amplification: Capital expenditure by domestic and overseas cloud vendors continues to grow rapidly. According to Lightcounting's forecast, global sales of Ethernet optical modules for cloud data center markets will continue to grow, surpassing $30 billion by 2030, with sales of Ethernet optical modules for AI clusters approaching $20 billion. Leading Chinese manufacturers are already in sync with top global customers in R&D and sample testing of 1.6T optical modules and are actively deploying new solutions such as LPO/CPO.

[New Opportunities for Optical Communication under the Scale-Up Trend]

Under the Scale-Up wave, all segments of the optical communication industry chain will benefit in stages, from optical chips/components to optical fiber and cable, and then to equipment and system integration, with the entire industry ecosystem ushering in new growth opportunities.

Optical chips/components lead the way: The iteration speed of optical modules from 400G to 800G and then to 1.6T has significantly accelerated, with low-power LPO/LRO and highly integrated CPO also being deployed at scale. In 2025, Alibaba Cloud will deploy LPO optical modules at scale for the first time, bringing significant energy efficiency gains; Tencent's self-developed CPO switch goes online, revolutionizing the computing power era with optical interconnects; Nvidia also released two CPO switches during GTC 2025.

Structural opportunities for optical fiber and cable emerge: Multimode fiber has significant cost advantages in short-distance, high-density scenarios, and demand for bend-resistant, ultra-high-density multi-core cables and MPO/MTP fiber connectors in in-rack cabling scenarios will also increase. Hollow-core fiber, as a disruptive innovation in transmission media, is accelerating pilot applications in intelligent computing centers. Microsoft plans to deploy 15,000 kilometers of hollow-core fiber within two years, and domestic operators are also accelerating validation.

In summary, the computing power sector remains highly favored, with strong recommendations for leading companies in the computing power industry chain such as optical module leaders Zhongji Xuchuang and Eoptolink. It is also recommended to pay attention to the "one major and five minor" optical device companies: TFC Communication + Shijia Photon / Taichen Optical / Changxin Bochuang / Dekeli / Dongtian Micro, as well as domestic computing power industry chain companies, such as those involved in liquid cooling, including Inovance and Dongyangguang.