Morgan Stanle
2026-07-14 11:00:00Morgan Stanley says AI networking could reach $70 billion by 2030, with copper set to benefit before CPO
Morgan Stanley has raised its estimate for the AI scale-up networking opportunity in 2030 to about $70 billion, more than four times last year’s forecast. The bank’s latest note does not argue that co-packaged optics, or CPO, is about to break out. Its point is almost the opposite: as AI clusters move from single-rack systems to multi-rack deployments, the overall back-end networking market grows sharply, but short-distance links still favor copper for now on cost, latency, and power. In Morgan Stanley’s timeline, CPO penetration in scale-up networks stays near zero in 2026 and 2027, starts to appear in 2028, and only reaches a meaningful 20% to 30% by 2029 to 2030.
That sequencing shapes the list of likely winners. Companies helping copper run faster and farther, including Astera Labs, Broadcom and Semtech, are positioned to benefit earlier. Keysight Technologies stands out because broader architectural fragmentation across NVLink, UALink, SUE, PCIe and cloud-specific interconnects drives more testing demand regardless of which link technology wins. By contrast, Corning, Lumentum and Coherent offer more upside if large GPU domains arrive on schedule and optical content expands materially. Morgan Stanley’s view is that the market is getting bigger, but the path to large-scale optical adoption still depends on platform timing, manufacturing maturity and customer willingness to absorb complexity in packaging, maintenance and supply chains.