Key insights
- 3M joined a coalition to standardize optical connectivity for AI infrastructure, addressing scalability challenges in data centers. This initiative, involving major tech players, aims to develop open specifications for expanded beam optical connectors, improving reliability and performance. While 3M's stock is near its low, this move signals a strategic focus on high-growth areas, potentially offering a slight positive influence on market sentiment.
ST. PAUL, Minn. - 3M (NYSE:MMM) announced today it has joined a multi-source agreement with technology companies to develop open specifications for expanded beam optical connectivity in AI infrastructure. The move comes as the $74.8 billion industrial conglomerate trades near its 52-week low, down 10% year-to-date, though InvestingPro analysis suggests the stock remains undervalued at current levels.
The coalition includes Accelink, Aperion, AMD, Amphenol, Arista Networks, Cisco, Meta, Molex, Nexthop-ai, Oracle, Senko, Source Photonics, Sumitomo, TE Connectivity, viaPhoton, and Xscape Photonics. The group will collaboratively develop standardized specifications for expanded beam optical connector solutions, according to a press release statement.
Expanded beam optical technology provides advantages in reliability, ease of maintenance, and performance in high-density environments. The technology addresses challenges as AI data center deployments expand.
"As AI workloads scale, the physical layer of data centers is being pushed to new limits—requiring optical connectivity solutions that are not only high-performance, but also interoperable and scalable across a growing ecosystem," said Alex An, vice president of 3M’s data center vertical.
Oracle serves as co-chair in the formation of the expanded beam optical multi-source agreement. Rajagopal Subramaniyan, senior vice president of OCI networking at Oracle, said strict connector hygiene requirements slow network builds and add operational overhead for ongoing link triage.
"Expanded beam technology can overcome these bottlenecks, enabling more resilient cluster topologies and future rack-scale optical architectures," Subramaniyan said.
The multi-source agreement provides a framework for members to contribute to a shared specification covering multiple expanded beam optical connector configurations. The initial technical working group has begun development of the first connector specification.
The agreement remains open to additional members across the data center and networking ecosystem. Information is available at www.ebomsa.org.
In other recent news, 3M Company reported its first-quarter earnings for 2026, revealing an earnings per share (EPS) of $2.14, which exceeded analysts’ expectations of $1.98. However, the company’s revenue was slightly below projections, coming in at $6 billion compared to the anticipated $6.01 billion. Despite the revenue miss, the company noted strong operational improvements and strategic initiatives that contributed to its performance. Jefferies responded to the earnings beat by raising its price target for 3M from $160 to $170, while maintaining a Hold rating, highlighting that non-operating items added approximately $0.13 to the earnings surprise. RBC Capital, however, lowered its price target for 3M to $133 from $134, citing concerns over PFAS liabilities, but kept an Underperform rating. Barclays, on the other hand, reiterated its Overweight rating on the stock with a price target of $185. These developments reflect differing analyst perspectives on 3M’s financial health and future prospects.
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