Let’s be real here…
Every AI data center Nvidia ever builds needs optical transceivers to move data between GPUs.
Not because of GPU performance. Not because of CUDA software. Not because of rack density.
Because of physics. Electrical signals cannot move data at the bandwidth AI clusters require over distances greater than a few meters. Light can.
$INTC own data center documentation confirms fiber optic interconnects at 800G+ are required for every GPU cluster at scale.
Demand for 800G transceivers is STRONG with volume ramps underway in 2026.
$AAOI is still ONLY approximately $15B compared to peers as $LITE $COHR $CIEN at +50$B.
The GPU market is $500B+. The company supplying the optical layer those GPUs depend on for data movement is at $15B.
Rosenblatt raised their price target to $220 in May 2026, up from $140 in March.
Current price implies limited upside on Rosenblatt’s numbers relative to earlier valuations.
Now execution matters.Either the AI GPU capex cycle delivers the optical component volume the data suggests, or it doesn’t.
At current market cap vs. the $500B+ infrastructure build, valuations reflect much of the outcome.
But when execution follows $AAOI will easily run past $280, $300, $320, $350, $400.
I’m long $AAOI.
-BP
Save this.
Not financial advice. DYOR.
Every AI data center Nvidia ever builds needs optical transceivers to move data between GPUs.
Not because of GPU performance. Not because of CUDA software. Not because of rack density.
Because of physics. Electrical signals cannot move data at the bandwidth AI clusters require over distances greater than a few meters. Light can.
$INTC own data center documentation confirms fiber optic interconnects at 800G+ are required for every GPU cluster at scale.
Demand for 800G transceivers is STRONG with volume ramps underway in 2026.
$AAOI is still ONLY approximately $15B compared to peers as $LITE $COHR $CIEN at +50$B.
The GPU market is $500B+. The company supplying the optical layer those GPUs depend on for data movement is at $15B.
Rosenblatt raised their price target to $220 in May 2026, up from $140 in March.
Current price implies limited upside on Rosenblatt’s numbers relative to earlier valuations.
Now execution matters.Either the AI GPU capex cycle delivers the optical component volume the data suggests, or it doesn’t.
At current market cap vs. the $500B+ infrastructure build, valuations reflect much of the outcome.
But when execution follows $AAOI will easily run past $280, $300, $320, $350, $400.
I’m long $AAOI.
-BP
Save this.
Not financial advice. DYOR.
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