Evercore said its AI channel checks related to Networking and Optics are positive for Nvidia (NVDA), Broadcom (AVGO), Astera Labs (ALAB), Marvell Technology (MRVL), and Macom Technology Solutions (MTSI).
“Our checks with 20 AI-Engineers confirm our view that connectivity remains a key bottleneck in AIsystems (both supply and speed), and that companies that deliver solutions at scale will enjoy tailwinds to revenues and margins. Every hyperscaler has a different strategy and supply chain – we think the checks are positive for NVDA, AVGO, ALAB, MRVL and MTSI, and we reiterate our OP [Outperform] ratings on each,” said analysts led by Mark Lipacis.
Nvidia (NVDA)
The analysts said Nvidia appears to be working towards having a Co-packaged Optics, or CPO, scale-up version of the NVLink switch in alignment with the Rubin Ultra release in the second half of 2027, although some believe it will more likely happen in 2028.
The analysts noted that they believe Peripheral Component Interconnect Express, or PCIe, and Ethernet have a chance to take share from NVLink, but NVLink will be viewed as having superior performance. The analysts added that Nvidia developed its own Digital Signal Processors, or DSPs, at 1.6T (terabits per second) and is expected to serve 50% of its internal demand with them and the remaining from Broadcom (AVGO).
Broadcom (AVGO)
Lipacis and his team said that Broadcom’s Electro-Absorption Modulated Lasers, or EML, capacity is increasing from 43M to 44M in 2025 to 50M in 2026, and the Continuous Wave, or CW, laser is expanding from 15M to 16M in 2025 to 30M in 2026.
The analysts added that non-Broadcom switches struggle to support Linear-drive Pluggable Optics, or LPO modules. The analysts noted that the company’s 1.6T DSPs are considered best-in-class, and a majority of Meta Platforms’ (META) 1.6T DSP demand is expected to go to Broadcom.
Astera Labs (ALAB)
Amazon’s (AMZN) Trainium-3 is expected to include ALAB’s Scorpio X switches for two out of three Trainium-3 SKUs, with the third SKU being switchless, according to the analysts. The analysts said that Astera is increasingly being viewed as a mature supplier versus a start-up.
Marvell Technology (MRVL)
Lipacis and his team said that all of Google’s (GOOG) (GOOGL) 1.6T DSP demand is expected to be serviced by Marvell. The analysts added that for 800G DSPs, sources believe Marvell has a 70% share, and Broadcom has the remaining 30% share. Marvell is viewed as having a superior 1.6 TIA on performance and new packaging architecture.
In addition, the analysts said that Celestial AI is seen as part of a broader strategy to more meaningfully compete with Broadcom as a full-stack, one-stop application-specific integrated circuit, or ASIC, design partner.
Macom Technology Solutions (MTSI)
The analysts said that sources believe Macom is gaining share in 1.6T photodetectors, or PDs. Selling 1.6T PDs for $2.50 to $3 versus 800G for only $0.50 to $0.60. The company is expected to capture 50% to 60% of the 1.6T module market, with the remainder going to Broadcom, GCS, and SiFotonics.