30 Best and Worst Data Center Stocks

26. Infinera Corporation (NASDAQ:INFN)

Upside Potential: 1%

Number of hedge funds: 17

Infinera Corporation (NASDAQ:INFN) is a provider of open optical networking solutions and advanced optical transmission equipment, enabling carriers, cloud operators, governments, and enterprises to scale network bandwidth, enhance service innovation, and automate network operations. In 2024, Infinera faced a challenging operating environment due to project delays and weaker trends in key end markets. Consequently, the company’s year-on-year revenue declined by 22%, 9%, and 10% in the first three quarters of 2024, respectively.

The company’s prospects shifted in mid-2024 when, on June 27, Nokia announced its intention to acquire Infinera Corporation (NASDAQ:INFN) for an enterprise value of $2.3 billion, a 28% premium to Infinera’s share price of $6.65 on June 26. The deal is expected to close in the first quarter of 2025, stabilizing the share price around the deal value. This acquisition is mutually beneficial: Infinera Corporation (NASDAQ:INFN) will gain access to significantly greater financial resources, Nokia’s global supply chain, customer base, and better competitive positioning. Nokia will benefit from expanding its networking products for data centers and increasing its exposure to webscale customers, the fastest-growing market segment.

In another development, in October 2024, Infinera Corporation (NASDAQ:INFN) and the U.S. Department of Commerce signed a non-binding agreement to receive up to $93 million in direct funding under the CHIPS & Science Act. This proposed funding, combined with available investment tax credits, could result in over $200 million in total federal incentives, as well as potential state and local incentives.