CITIC Securities: XPO will significantly expand the application scenarios of pluggable optical modules.

CITIC Securities pointed out that AI computing power clusters are shifting from "simply stacking computing power" to "competing for network efficiency", which will put forward more comprehensive and stringent requirements for AI interconnection solutions. XPO, as a new generation of pluggable optical module solution jointly launched by Arista and more than 60 partners, breaks through the physical limits of traditional OSFP with 8 times the bandwidth, 4 times the front panel density, native liquid cooling and complete hot plug characteristics. At the same time, it considers the performance advantages of CPO/NPO and the operational convenience of pluggability, providing a more practical upgrade path for AI at the million-card level in scenarios of Scale up/Scale out/Scale across. CITIC Securities believes that XPO will significantly expand the application scenarios of pluggable optical modules, drive domestic optical module manufacturers to achieve smooth evolution in core technologies and upgrade to the next generation of optical interconnection, and initiate a new round of performance valuation growth cycle.