Nvidia's CPO Switches Enter Mass Production — Is Optical Networking the Next AI Theme?

Optical communication stocks rallied broadly on August 17th, with AXT Inc jumping more than 17% and Marvell Technology gaining nearly 6% — a clear sign of capital rotating toward this corner of the AI infrastructure stack. The catalyst came from Nvidia, which announced that its Spectrum-X Ethernet Photonics switches built on CPO (co-packaged optics) technology have officially entered mass production. The significance here runs well beyond a routine product launch: based on the disclosed figures, the new architecture delivers 5x better network power efficiency, 5x longer uninterrupted runtime for AI workloads, and a 10x improvement in mean time between failures compared to traditional pluggable optical networking. Taken together, those three numbers point to a single pain point — the biggest constraint on large-scale AI clusters has never really been raw compute, but rather power consumption and reliability dragging down overall efficiency. CPO packages optical components directly alongside the chip precisely to tackle both energy and reliability challenges as data center scale keeps expanding. The more consequential signal is what mass production itself implies: CPO has moved past technical validation and into commercial deployment at scale. That transition is typically where profits across the supply chain start to materialize, and companies positioned in the relevant segments could see meaningful order growth as a result. As the AI narrative gradually broadens out from compute chips toward the supporting infrastructure layer, does optical networking have a shot at becoming the next major theme? Which company's execution are you watching most closely? Flexibly allocate across core U.S. tech equities and diversified RWA portfolios on Bitget — achieve efficient cross-asset allocation and precision risk hedging: https://www.bitget.com/promotion/futures-rwa