We recently published a list of the 11 Hidden AI Stocks to Buy Right Now. In this article, we are going to take a look at where Ciena Corporation (NYSE:CIEN) stands against other hidden AI stocks.
David Grain, Founder & CEO of Grain Management, joined CNBC on May 1 to discuss the AI-driven demand for data centers and tariff uncertainty. The main concerns regarding tariffs are the potential impact on costs, the resilience of supply chains, and the overall effect on business operations and their expansion. He also shared his perspective on why investors are still confident in the broadband and digital infrastructure sector. He characterized broadband as universally essential and emphasised that the demand for faster connectivity has not slowed, which is why the regulatory support for broadband expansion is globally robust. Grain noted that the administration has also met expectations for lighter regulation in the infrastructure sector, which makes it easier to advance projects and close deals. He described the admin’s stance as pro-growth and supportive of secure and competitive networks. Grain also observed that infrastructure, especially broadband, is an area where there is bipartisan support, given its positive impact on economic growth at both the state and local levels.
DeepSeek’s announcement was also followed by reports that suggested that some companies might be pulling back on data center spending. However, the latest earnings reports appeared to settle at least this debate and confirmed that the investments in this sector were still ongoing. David Grain elaborated on the current trends in data center investments and also stated that the demand for data centers is rising due to the increasing expansion of AI, as it requires vast amounts of computing power. He explained that while the demand here is not slowing, the feasibility of building new data centers is still influenced by the availability of reliable and high-capacity electricity.
Our Methodology
We sifted through financial media reports to compile a list of the top hidden AI stocks with AI-related operations and opportunities. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of telecom engineers discussing a communication infrastructure diagram.
Ciena Corporation (NYSE:CIEN)
Number of Hedge Fund Holders: 52
Ciena Corporation (NYSE:CIEN) is a network technology company that provides hardware, software, and services for various network operators. It focuses on the telecommunication industry and large cloud service providers. The company also uses AI, particularly through the Blue Planet and Navigator Network Control Suite, to transform customer support, network management, and service operations.
In Q1 2025, direct revenue from cloud providers constituted 32% of Ciena’s total revenue of $1.07 billion. The cloud provider segment drives growth for the company partly due to its connection to AI infrastructure. Notably, 5 cloud providers were among Ciena’s top 10 customers in Q1. The company’s WaveLogic 6 Extreme solution offers increased capacity and reduced space and power requirements. These are crucial for the massive scale of cloud data centers supporting AI.
In Q1, Ciena added 20 new customers for WaveLogic 6E. The WaveLogic 5 solution also continues to be a foundational technology, with over 160,000 modems shipped worldwide. It underpins the network backbones for the AI and cloud economy. Ciena saw a 2.9% year-over-year increase in revenue to $1.07 billion in Q1 2025 as it benefited from the recalibration of AI-driven network architecture deployments.
Diamond Hill Mid Cap Strategy stated the following regarding Ciena Corporation (NYSE:CIEN) in its Q4 2024 investor letter:
“On an individual holdings’ basis, top contributors to return in Q4 included Ciena Corporation (NYSE:CIEN) and WESCO. Networking systems company Ciena is benefiting from continued demand from cloud customers and stabilization from service providers, giving a boost to shares in the quarter.”
Overall, CIEN ranks 6th on our list of the hidden AI stocks to buy right now. While we acknowledge the growth potential of CIEN, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CIEN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
