Networks and Fiber Optics

Components Performance/Risk
Period Return
149.7%
Return Rank
Strong
Risk Exposure
High Risk

At the heart of global connectivity,  data centers provide storage, processing, and servers but connectivity is of the essence, demanding  high quality throughput, the ability to move traffic between clouds and company edges, and security

Spanning the data center core to network edge, infrastructure networks race to address ambitious targets boosted by AI demand in data accessibility and in speed, while aiming for temperature control and power consumption

Fiber optic network technology, deeply embedded in infrastructure for connectivity within data centers and between data centers, are rising up to the challenge

At the heart of technological advance, silicon photonics combine the silicon integrated circuit and the semiconductor laser to enable faster data transfer, inviting deeper specialization aimed at

  • temperature control to avoid overheating,
  • speed in global communication across many GPUs,
  • interconnectivity between one GPU and the other GPUs by optical connection, potentially at the chip level to maximize efficiency with optical input/output (I/O)

 

To address the novel performance requirements of AI models, some companies engage in specializations, while others favor vertical integration to enable high data-rate transmission between servers, switches, and routers in the network

The selected equities mirror the divide between very large, fully integrated industry actors,  such as Broadcom, Intel or Cisco, dominant in semi-conductors as well as data communications, fiber glass experts (Corning) or cable giants (Prysmian) and niche specialists, providing optical communication components (Fabrinet or Coherent)  or critical  hyperconvergence solutions (Nutanix, Broadcom-VMware as well as IBM, HPE, Dell and others)

Hyperconvergence is a global trend and is defined by one of the vendors (Nutanix) as distributed infrastructure platform with intelligent software to create flexible building blocks that replace legacy infrastructure consisting of separate servers, storage networks, and storage arrays

With extreme performance and volatility, Applied Optoelectronics could not be included in the theme but the firm is a relevant player in the sector

 

This theme complements recently published 

Follow-up themes to be published shortly are

  • Cloud - Data Architecture Applications
  • Data - Enterprise Platforms
Theme Components
Name
Ticker
Sector
Industry
Cur. Price
Mkt. Cap
Performance
Momentum
Risk Rank
Risk Contrib
 
Broadcom AVGO TechnologyDatacom, Telcom & Network Equipt427.762,028 B39.8% Weak Up Above Average
Cisco Systems CSCO TechnologyDatacom, Telcom & Network Equipt121.43480 B77.8% Neutral Average Risk
Ciena CIEN TechnologyDatacom, Telcom & Network Equipt412.3958 B335.7% Neutral High Risk
Lumentum Holdings LITE TechnologyDatacom, Telcom & Network Equipt890.1764 B640.4% Weak Up High Risk
Coherent COHR TechnologyOptics & Photonics379.1371 B232.5% Weak Up High Risk
Fabrinet FN TechnologyOptics & Photonics562.3820 B66.7% Weak Up High Risk
MACOM Technology Solutions Holdings MTSI TechnologyOptics & Photonics310.8223 B146.7% Neutral High Risk
Intel INTC TechnologySemiconductors - Broad Line101.65508 B357.5% Neutral High Risk
Marvell Technology MRVL TechnologySemiconductors - IC Design (fabless)218.72191 B176.6% Neutral High Risk
Sanmina SANM TechnologyElectronic Systems, Parts & Analog Circuits202.7311 B68.5% Sharp Down High Risk
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