10 AI News You Should Take a Look At

7. Ciena Corporation (NYSE:CIEN)

Number of Hedge Fund Holders: 40

Ciena Corporation (NYSE:CIEN) offers hardware and software solutions for video, data, and voice traffic delivery, including networking platforms, automation software, and global services for communication networks worldwide.

On January 28, JPMorgan upgraded Ciena (NYSE:CIEN) to Overweight from Neutral and raised its price target to $88 from $84. Analyst Samik Chatterjee noted limited near-term impact on CIEN’s fundamentals despite concerns over AI model capital efficiency. The upgrade was made due to strong cloud provider capex, telecom recovery, and investments from MOFN providers in data center connectivity. Key drivers include recovering telecom capex, rapid data center interconnect investments, and attractive valuation at 19x CY26 EPS. JPMorgan forecasts 8%-11% growth for FY25 and FY26, attributing a 24x target multiple for upside. Chatterjee noted:

“While we remain cautious about lofty valuations for Optical companies, the recent pullbacks offer attractive opportunities. Among Optical names, our relative rank order is COHR, followed by LITE, and then CIEN. In Optical components, we see stronger growth and margin levers tied to datacenter densification and next-generation datacom technologies, offering more premium opportunities compared to system providers like CIEN.”