Goldman Sachs significantly increased Innolight's 2026-2028 earnings estimates by 65%, 108%, and 119% respectively, driven by much higher silicon photonics module volumes and the adoption of 1.6T/3.2T products. This revision reflects an increase in AI capital expenditure, which is expected to lift blended average selling prices and margins for the optical sector.
Optical networking demand is accelerating faster than expected, driven by AI capex and next-gen 1.6T/3.2T products, tightening supply for key components.