The recent 30-50% drawdown across optics names is widely interpreted as a valuation and positioning reset, not a demand issue. Research-driven voices favor bottleneck layers like testing and alignment equipment as Co-Packaged Optics (CPO) ramps, rather than obvious transceiver names. Most analysts view the selloff as a buyable washout, anticipating earnings in late July to mid-August as a potential catalyst.
The photonics sector is undergoing a valuation correction, but underlying demand for critical components like CPO and testing equipment remains strong.