We came across a bullish thesis on Ciena Corporation on X.com by @TheValueist. In this article, we will summarize the bulls’ thesis on CIEN. Ciena Corporation’s share was trading at $271.32 as of February 6th. CIEN’s trailing and forward P/E were 319.20 and 62.50 respectively according to Yahoo Finance.
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Ciena Corporation, a network technology company, provides hardware, software, and services for various network operators in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and India. Ciena Corporation is undergoing a structural re-rating as artificial intelligence shifts the primary infrastructure bottleneck from compute to networking, repositioning the company from a historically cyclical telecom optical vendor to a critical enabler of AI-driven connectivity.
The company is emerging as a core supplier of high-speed coherent optical systems for hyperscalers, neoscalers, and service providers, supported by a record order book, accelerating cloud demand, and technology leadership that management believes is 18–24 months ahead of peers.
This transition is already evident in results: after a digestion-driven decline in fiscal 2024, fiscal 2025 marked a clear inflection, with revenue growth accelerating to nearly 30% year-on-year in recent quarters, cloud revenue reaching close to 40% of total sales, and adjusted operating margins expanding faster than expected.
Ciena’s growth is being driven by structurally new AI networking use cases, particularly long-distance “scale-across” optical networks connecting geographically distributed GPU clusters and out-of-band data center management networks.
These deployments are fundamentally different from traditional telco capex cycles, are less oversubscribable, and directly monetize hyperscalers’ multi-billion-dollar AI investments. Early flagship wins are already ramping to hundreds of millions of dollars in potential revenue, while expanding engagement with neoscalers and service providers further diversifies demand and pulls through higher-value services.
Operationally, Ciena is leveraging deep vertical integration across coherent DSPs, optics, line systems, routing, software, and services, preserving margins while scaling volume. The acquisition of Nubis Communications extends this strategy inside the data center, adding optionality in future intra-DC interconnect architectures.
While valuation has rerated sharply and embeds high expectations, Ciena offers a compelling bullish setup as a structural AI networking winner, with visible multi-year growth, improving profitability, strong free cash flow, and multiple catalysts that can sustain strategic relevance well beyond the current cycle.
Previously, we covered a bullish thesis on Cisco Systems, Inc. (CSCO) by Kroker Equity Research in May 2025, which highlighted its pivot toward recurring software revenue, AI infrastructure momentum, and the strategic importance of the Splunk acquisition. CSCO’s stock price has appreciated by approximately 32.69% since our coverage. @TheValueist shares a similar view but emphasizes Ciena Corporation’s AI-driven optical networking growth and structural re-rating.
Ciena Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 70 hedge fund portfolios held CIEN at the end of the third quarter which was 57 in the previous quarter. While we acknowledge the risk and potential of CIEN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CIEN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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