Northland analyst Tim Savageaux says datapoints at the European Conference on Optical Communication support his caution on the timing of 400G ramps both inside/outside the data center, driven in part by technical complexity. Datapoints at the show indicate a “large cut” in 400G rollout plans at Amazon.com (AMZN) this year, which poses a “significant risk” to Inphi (IPHI), the analyst tells investors in a research note. Shares of Inphi are well off their lows on the day but remain down 5% to $60.48 in early afternoon trading. Savageaux also believes that consensus views overestimate the possible impact of the Cisco Systems (CSCO)/Acacia Communications (ACIA) merger on Inphi’s coherent application-specific integrated circuit unit. He believes Lumentum (LITE) is more likely to benefit with its Acacia -powered CFP2 DCO platform in the near term. Further, the analyst’s early update from the European Conference on Optical Communication is positive for NeoPhotonics (NPTN). Positive Huawei demand dynamics is a notable plus for the company, says Savageaux. He has an Underpeform rating on Inphi, and Outperform ratings on both Lumentum and NeoPhotonics.
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