Mizuho Counters Tech Delay Rumors, Raises Optical Engine Forecasts on Strong Nvidia Demand

Mizuho has refuted recent rumors that key data center technologies like Co-packaged Optics (CPO) and 800V power would be delayed, instead raising its forecast for optical components.

This confidence is backed by Nvidia's surging networking revenue, increased AI infrastructure spending from tech giants, and positive signals from the supply chain.

The report provides a strong counter-narrative to a bearish note last week that caused a sell-off in optical and power-related stocks, shifting the focus from timing risks to execution.

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Mizuho's latest report confidently states that key next-generation data center technologies are on track, directly challenging recent market fears.

Just last week, the market was rattled by a research note suggesting that crucial upgrades like Co-packaged Optics (CPO) and Nvidia's 800V direct-current (DC) power systems would be delayed until 2028-2029. This news sent the stocks of optical component makers tumbling as investors worried about a potential slowdown.

However, Mizuho's analysis paints a different picture, arguing there are no significant delays. They believe the main challenge isn't about when these technologies will arrive, but how well the supply chain can execute to meet the massive demand. This view is supported by several key factors.

First, the most direct evidence comes from Nvidia itself. The company's recent earnings report was stellar, with its data center networking revenue nearly tripling year-over-year to about $15 billion. This isn't just a number; it's proof that the demand for high-speed optical connections needed to link AI processors is already exploding.

Second, the biggest customers are spending more than ever. Tech giants like Meta have massively increased their capital expenditure (capex) plans for 2026, with total AI infrastructure spending projected to be in the hundreds of billions. This huge investment directly translates into more orders for the optical engines and power systems that Mizuho covers.

Finally, signals from the supply chain are aligning with this optimistic view. Industry analysts like LightCounting have raised their forecasts for high-speed optical shipments, and component suppliers are actively expanding their production capacity for critical parts like InP DFB lasers, the technology Mizuho sees as the practical choice for the near future.

In essence, Mizuho's report reframes the conversation. Instead of a delay, the industry is facing a high-quality problem: keeping up with unprecedented demand driven by the AI revolution.

Co-packaged Optics (CPO): A technology that integrates optical connectivity directly onto the same package as a computer chip (like a GPU), improving speed and power efficiency for data transfer.
800V DC Power: A new, more efficient power delivery standard for data centers designed to handle the immense energy needs of modern AI racks.
InP DFB Lasers: A type of high-performance laser (Indium Phosphide, Distributed Feedback) used as a light source in optical communications, known for its stability and suitability for high-speed data transmission.