Ciena Corp. (NYSE:CIEN) rebounded as much as 14.3 percent in intraday trading on Tuesday to $445.36 apiece, helped by a peer’s growth outlook of high double digits for the optical interconnects sector over the next four years.
At its recent Investor Day, its peer, Marvell Technology, said it expects the industry to grow by 60 to 70 percent to about $65 billion through 2030, with switching and storage alone reaching $85 billion, or a compounded annual growth rate of 40 percent.
The figures were markedly higher than Ciena Corp.’s 30 percent growth outlook for its business by 2029.
For illustration purposes only. Photo by Brett Sayles on Pexels
Analysts Upbeat on Ciena
In other news, Mad Money host and former hedge fund manager Jim Cramer helped boost investor sentiment in the stock, saying in the lightning round of the show that he believes Ciena Corp. “is [a] very good” stock.
“I happen to like optical [stocks],” he added, also underscoring another optical stock whose price he was waiting for to go down to get back in.
Late last month, Ciena Corp. also received a highly optimistic coverage from investment firm Bernstein Corp., having received an outperform rating and a $440 price target.
Bernstein acknowledged near-term supply constraints for the company, but said that the stock remained undervalued at present.
It expected availability of key components such as ceramic packaging, pump lasers, and memory to improve and support stronger growth beyond 2027.
Evercore also maintained an outperform rating and a $550 price target for the stock, representing a 23.5 percent upside potential versus its closing price on Tuesday.
Evercore said that the coverage reflected its optimism that the company is capable of achieving more than $25 in earnings per share, and that the stock should reach the mid-to-high $500 range on a low 20x price-to-earnings multiple.
Q2 Hedge Fund Holdings Soar
Apart from analysts, institutional investors also signaled their bullish stance for the company in the second quarter of the year.
Data from Insider Monkey showed that hedge fund holders increased to 81 during the period from 73 in the first quarter of the year, indicating that more professional investors are establishing exposure in the stock.
More importantly, their combined holdings increased by 2 percent to $3.997 billion from $3.913 billion quarter-on-quarter.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
