Great Wall Fund's Liu Jiang: Focus on optical communication and other AI computing power niche fields

Recently, the concept of optical communication has repeatedly become active, and the sector’s popularity continues to rise. Recently, Liu Jiang, fund manager of Great Wall Jiuxiang Fund, stated in an interview with the media that technological growth still has the potential to be the main theme of the market this year, and the “selling shovels” in the AI industry—the fields related to computing infrastructure—will become his key areas of focus. Among the subdivided directions of the computing power chain, he is particularly attentive to the optical communication sector.

“As the ‘selling shovels’ part of the AI industry, the computing power chain is expected to continuously benefit from the demand growth driven by industry development,” Liu Jiang believes. Previously, market concerns about the capital expenditure of leading manufacturers reflected static thinking. In reality, with the ongoing iteration of large models and the development of the AI application ecosystem, a dynamic positive cycle between computing demand and capital expenditure is likely to form. The explosion of downstream applications will continue to promote the construction of computing infrastructure, and the increased supply of computing power can in turn foster the prosperity of the application ecosystem. As the core foundation of the AI industry, the computing power chain is expected to continue benefiting from industry expansion.

Within the subdivided directions of the computing power chain, Liu Jiang focuses on the optical communication sector. His reasoning is not only due to the increasing demand for computing power but also because the technology of optical communication itself is undergoing significant changes. He pointed out that, from the perspective of industry fundamentals, optical communication, as a key link in the AI computing power chain, shows an upward long-term penetration trend. The development of emerging solutions such as OCS, NPO, and CPO driven by overseas tech giants also fully demonstrates the importance of optical interconnection, continuously boosting the value of optical connectivity.

“Optical communication is experiencing high prosperity, showing a trend that may surpass the overall computing industry chain. Whether from industry chain data or technological substitution logic, this validates its current investment value,” Liu Jiang said. As the performance of computing cards continues to expand and computing clusters grow, the requirements for interconnection speed, bandwidth, and power consumption are constantly increasing. Based on its performance characteristics, optical interconnection is expected to penetrate more scenarios and larger markets through emerging forms like NPO and CPO, such as scale-up applications, with the industry space potentially expanding significantly.

Regarding market concerns that CPO solutions might encroach on the optical module market, Liu Jiang believes this is more a narrative impact. The fundamentals of leading domestic optical module companies have not shown substantial changes. Driven by the overall high prosperity of the industry, all technological solutions are demonstrating strong development momentum.

Disclaimer

The information contained in this communication is sourced from channels and researchers deemed reliable by our company, but we do not make any explicit or implicit statements or guarantees regarding its accuracy or completeness. This communication is not a complete statement or summary of related securities or markets, and any opinions expressed may change without prior notice. It should not be used as a substitute for independent judgment or investment decision-making. Our company, its related institutions, employees, or agents are not responsible for any actions taken based on this entire or partial content or for any losses resulting therefrom. Without prior written permission from Great Wall Fund Management Co., Ltd., no one may distribute, copy, reprint, or publish this report or any part of it in any form, nor make any deletions or modifications that contradict the original intent. The fund manager reminds that every citizen has the obligation and right to report money laundering crimes. Every citizen should strictly comply with relevant anti-money laundering laws and regulations. Investment should be cautious.

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Editor: Liu Wanli SF014