BofA Downgrades Ciena (CIEN) to Neutral Citing Peaking Backlog and High Valuation After 200% Surge

Ciena Corporation (NYSE:CIEN) is one of the best US stocks to buy and hold in 2026. On January 20, Bank of America analyst Tal Liani downgraded Ciena to Neutral from Buy with an unchanged price target of $260. Although there is potential for further revenue growth, the firm is prioritizing caution due to downside risks such as peaking backlog levels, inflated expectations, and a steep valuation following Ciena’s 200% stock surge over the past year.

In Q4 2025, Ciena Corporation (NYSE:CIEN) achieved $1.35 billion in revenue, which was a 20% year-over-year increase, while quarterly EPS surged 69% to $0.91. This strong finish pushed full-year revenue to a record $4.77 billion, with a total annual EPS of $2.64, a 45% increase from 2024. The company also secured a record $7.8 billion in annual orders, resulting in a massive $5 billion backlog, of which $3.8 billion is composed of hardware and software.

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The company’s growth was fueled by diverse segments, particularly those supporting AI infrastructure and cloud scaling. The Routing and Switching business grew by 49% year-over-year, while Global Services increased by 25%. The Interconnect portfolio generated over $168 million in revenue for fiscal 2025, and the Blue Planet division contributed $115 million. Additionally, Ciena expanded its optical market share by two points year-to-date, driven by accelerating demand from cloud providers.

Ciena Corporation (NYSE:CIEN) is a network technology company that provides hardware, software, and services for various network operators in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and India.

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Disclosure: None. This article is originally published at Insider Monkey.