Morgan Stanley says large-scale adoption of CPO will take time, and copper cable technology will remain competitive for the next two years

A July 13 report from Morgan Stanley points out that large-scale adoption of CPO in Scale-Up networks is expected in 2029 and beyond, with only limited introduction in 2028. Copper cables, driven by innovations such as PAM4 modulation, DSP, and retimers, can sustain for another two years. The evolution of AI cluster scale from 72 GPUs to 576 and even 1,152 is the core driving force. The year 2026 marks the starting point for a non-NVIDIA Scale-Up ecosystem, with AMD MI400, Amazon Trainium 3, and Microsoft Maia beginning mass production, while Astera Labs and Broadcom become the main early beneficiaries. Morgan Stanley assigns an Overweight rating to NVIDIA, Broadcom, Astera Labs, and Keysight.