CITIC Securities: North American CSP capital expenditures show strong growth, continuing to recommend CPO and optical fiber industries.

The Zhongxin Securities Research Report pointed out that CPO is accelerating. Lumentum recently stated that the company has received orders related to CPO worth hundreds of millions of dollars, with an estimated CPO revenue of about 50 million dollars in 2026Q4, and a breakthrough expected in the first half of 2027. It is recommended to pay attention to the CPO industry chain: optical engines, FAU, laser ELS, MPO, Shuffle box, and polarization-maintaining fibers. The optical fiber industry is shifting towards a phase of "tight supply and simultaneous rise in quantity and price". Firstly, it is recommended to focus on companies with rod production capacities, and secondly, to pay attention to companies with larger optical fiber production capacities or specializing in special optical fibers. The capital expenditure of the four CSP companies in North America in the fourth quarter of 2025 continued to show strong growth momentum, and the capital expenditure outlook for the future is optimistic. We continue to be positive about the overseas AI computing power industry chain. The domestic AI red envelope war is ongoing, with traffic congestion issues during Alibaba's Thousand Questions activity period. We also recommend paying attention to the domestic computing power chain.