We recently compiled a list of the 10 Stocks Hurting From DeepSeek AI News That Could Turn Into Multibaggers. In this article, we are going to take a look at where Ciena Corporation (NYSE:CIEN) stands against the other stocks.
US semiconductor stocks are getting hammered after the Chinese launched an AI model that has many questioning United States dominance in the AI space. China is currently facing restrictions on importing state-of-the-art semiconductor equipment needed for AI training. The launch of DeepSeek AI despite these restrictions is an eye-opener for Western tech companies, and the investor sentiment is reflecting it.
As market participants scamper to gather more information on China’s progress, we decided to look at stocks that are not only taking a hit from this news but also provide an attractive buy-the-dip opportunity. Against the backdrop of Project Stargate, a US government initiative to pump private sector investments into AI infrastructure, these companies also offer a potential multi-bagger opportunity.
Usually, it is the low market cap companies that become multibaggers. However, the failure rate when betting on these companies is quite high. We therefore chose companies with a market cap between $10 and $25 billion. In this way, our list contains businesses that are already established and will thrive on the boost provided by Project Stargate while successfully managing any headwinds. We believe the downside to these stocks is minimal because of the already sound fundamentals of these companies.
A team of telecom engineers discussing a communication infrastructure diagram.
Ciena Corporation (NYSE:CIEN)
Ciena Corporation makes networking equipment for multiple industries together with providing services and software support. In the context of recent AI developments, the company sells fiber optics to connect data centers. The stock is down 15% today.
Data centers are evolving and we could soon have multiple data centers networked together in small spaces. This would be similar to how computers needed their own big rooms but we now have them in the palm of our hands. Nvidia CEO Jensen Huang recently claimed that a data center could be the new unit of computing. He was referring to how in the future, data centers would be connected together. This ‘connection’ is where Ciena Corporation’s networking expertise comes in.
CIEN is already up 11% this year and this optimism could continue as further AI investments continue to pour in. The stock was over $1000 two and a half decades ago at the peak of the dot com bubble. If the euphoria returns, similar levels can’t be ruled out.
Overall CIEN ranks 10th on our list of the stocks that are hurting from DeepSeek AI news that could turn into multibaggers. While we acknowledge the potential of CIEN as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as CIEN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.