Stifel sees AI supply constraints ahead of Q3 tech earnings

Stifel analysts predict AI infrastructure deployment will remain supply-constrained rather than demand-constrained ahead of the third-quarter tech earnings season. Companies are prioritizing demand forecasts over what they can currently ship, as hyperscalers and large purchasers are boosting their budgets. Stifel identifies LITE, CLS, VIAV, AMD, and NVDA as having the most favorable investment setups, while COHR and TTMI are also seen as positively biased.

The firm anticipates beat-and-raise results from AMD (NASDAQ:AMD), with more significant implications coming from the Helios acquisition and long-term commentary. For NVDA (NASDAQ:NVDA), the focus will shift to Vera Rubin volume in Q4 of fiscal year 2027, with confidence in a 72%-73% gross-margin framework expected as memory costs increase. Stifel's ECOC work indicates Spectrum-6 CPO attach is outpacing expectations, adding networking upside alongside compute power.

LITE (NYSE:LITE) is currently Stifel's top optical setup recommendation, with ECOC meetings reinforcing demand ahead of available laser supply. Management noted that NVIDIA's UHP-laser requirements have accelerated into year-end and fiscal year 2027, with additional demand in December exceeding shipment capacity. Stifel maintains a constructive outlook on COHR (NASDAQ:COHR), citing a recent CTO meeting that bolsters the view that PhotonLink/CPO primarily displaces copper and expands the addressable market. Management estimates roughly $30 billion in incremental annualized sales and marketing from 2030.

CLS (NYSE:CLS) remains one of Stifel's most highly-convinced positions, as their current framework projects a 2027 revenue floor of around $35 billion. TTMI (NASDAQ:TTMI) provides direct exposure to escalating AI PCB complexity, backed by a 1.49x book-to-bill ratio and approximately $600 million in expected second-half 2026 non-manufacturing revenue.

VIAV (NASDAQ:VIAV) remains one of Stifel's preferred earnings setups, as CPO testing moves from development into manufacturing. At ECOC, VIAV, SENKO, and Advantest showcased an automated production test cell operating at around 40 units per hour. The article expects beat-and-raise results, with initial CPO production-test revenue and the F2Q outlook serving as key drivers.