CIEN

Ciena Corporation CIEN reported third-quarter fiscal 2026 adjusted earnings of $2.11 per share, which soared 215% year over year and beat the Zacks Consensus Estimate of $1.74. Quarterly revenues rose 37% to $1.67 billion and topped the $1.65 billion consensus mark. AI-driven networking demand remained the key growth engine. Cloud provider revenues accounted for 53% of total sales and jumped 82% year over year, underscoring the scale of hyperscaler spending behind Ciena’s record quarter. Product demand remained strong across Ciena’s optical portfolio. Revenues from RLS and Waveserver each increased more than 55% year over year, while pluggables revenues more than doubled as WaveLogic 6 Nano ramped. WaveLogic 6 Nano 800ZR pluggable shipments also more than doubled sequentially. Ciena received a significant direct performance optics module order and secured a second multi-rail win, extending its participation in hyperscaler infrastructure. The company also posted record shipments of WL5e, WL6e and WL6n products. Management said a growing backlog and customer commitments are providing multi-year visibility, and the company has entered long-term supplier agreements to support elevated demand. APAC revenues climbed 58% year over year, with strength across the region. Customer concentration was notable, with two customers each representing more than 10% of revenues and together accounting for 41.7% of the quarter’s top line. Networking Platforms revenues increased 44% year over year to $1.36 billion and represented 81.1% of total sales. Optical Networking revenues rose 46.1% to $1.19 billion, while Routing and Switching revenues advanced 30.6% to $164.4 million. Platform Software and Services revenues grew 9.6% to $98.6 million. Global Services revenues increased 20.8% to $193.6 million, supported by higher maintenance, implementation and advisory revenues. Blue Planet Automation Software and Services revenues fell 16.5% to $23.2 million. Ciena Corporation price-consensus-eps-surprise-chart | Ciena Corporation Quote Geographically, the Americas generated 79% of fiscal third-quarter revenues, while Europe, the Middle East and Africa contributed 11% and Asia-Pacific accounted for 10%. That mix kept the Americas as Ciena’s dominant revenue region even as APAC expanded sharply. Adjusted gross margin expanded 450 basis points (bps) year over year to 46.4%. Adjusted operating expenses rose 5.2% to $400 million, well below revenue growth, supporting stronger profitability. That operating leverage lifted adjusted operating margin to 22.5% from 10.7% a year earlier, an improvement of 1,180 bps. Adjusted EBITDA increased 160.2% year over year to $411.1 million. Cash provided by operations rose 13% year over year to $196 million. Free cash flow declined 14% to $116 million, even as the company continued to generate positive cash from operations. Cash and investments doubled year over year to $2.8 billion. DSO improved to 76 days from 88, and inventory turns increased to 3.5 from 2.7. Net debt rose to $431 million from $204 million. Ciena repurchased about 0.4 million shares for $171.7 million during the quarter, bringing capital returned under its $1 billion repurchase program to roughly $665 million. The company also completed a $2.9 billion, 0% coupon convertible debt offering, which management said lowered overall interest expense and enhanced financial flexibility. For fourth-quarter fiscal 2026, Ciena expects revenue of $1.75 billion (+/- $50 million). Adjusted gross margin is projected at 45% (+/- 50 bps), and adjusted operating expenses are expected to be $415 million (+/- $10 million). Adjusted operating margin is forecast at 20% (+/- 50 bps). Ciena raised fiscal 2026 revenue guidance to $6.42 billion (+/- $50 million), implying 35% year-over-year growth at the midpoint. For fiscal 2027, management’s early view indicates at least 30% revenue growth, an adjusted gross margin of 45-46%, and an adjusted operating margin of 25-27%. The outlook assumes that cloud providers continue AI infrastructure spending at levels consistent with recent public commitments, that optical component and substrate supply remains broadly stable, and that there are no material changes in tariff, trade, or foreign-exchange conditions. Ciena currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. NETGEAR, Inc. NTGR reported second-quarter 2026 non-GAAP earnings per share (EPS) of 16 cents compared with the Zacks Consensus Estimate of 2 cents. The company’s bottom line improved 167% year over year. Quarterly net revenues of $168.6 million declined 1.2% year over year but topped the consensus estimate of $157.9 million by 6.8%. Revenues exceeded management guidance of $150 million and $165 million. Corning Incorporated GLW reported second-quarter 2026 results with non-GAAP earnings of 78 cents per share, up 30% year over year and 2.6% above the Zacks Consensus Estimate. Core revenues of $4.74 billion surged 17%, surpassing the consensus by 2.9%. Corning’s revenue growth was driven by Optical Communications and Solar segments. Enterprise Networks sales jumped 65%, supported by accelerating demand for generative artificial intelligence infrastructure. Viavi Solutions Inc. VIAV reported better-than-expected fourth-quarter fiscal 2026 results. Non-GAAP earnings of 34 cents per share beat the consensus estimate by 13.33%, while revenues of $443.1 million increased 52.5% year over year. Viavi Solutions’ robust performance was driven by sustained demand from the data center ecosystem and aerospace and defense markets, along with contributions from acquired Spirent product lines. The Network and Service Enablement segment remained the primary growth engine, delivering nearly 70% year-over-year revenue growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ciena Corporation (CIEN) : Free Stock Analysis Report Corning Incorporated (GLW) : Free Stock Analysis Report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report Viavi Solutions Inc. (VIAV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record Q3 revenue of $1.7 billion and 22.5% operating margin, driven by an accelerating industry demand environment for data center infrastructure. Management attributes the performance to Ciena's role in re-architecting networks for AI, which requires high-speed, low-latency optical connectivity for both training and inferencing workloads. The company is seeing a fundamental shift where optics have become the 'indispensable element' for next-generation AI architectures across traditional WAN, AI-specific WAN, and intra-data center fabrics. Market share gains are being driven by the WaveLogic 6 Extreme platform, which remains the only 1.6 terabit high-performance modem available after 18 months on the market. The RLS (Reconfigurable Line System) has become the industry standard for disaggregated systems, maintaining a roughly 70% market share and serving as the foundation for 'scale across' AI applications. Management highlighted a significant competitive takeaway from a component rival, securing a win with a major hyperscaler that integrates Ciena's coherent technology into the customer's own platform. Strategic focus has shifted toward securing long-term supply capacity, with new agreements finalized through 2029 to support the massive multi-year demand backlog. Projecting to exit fiscal 2026 with over $10 billion in backlog, with visibility extending into 2028 due to lead times and sustained customer commitments. Preliminary fiscal 2027 guidance sets a revenue floor of $8.3 billion to $8.4 billion, representing at least 30% year-on-year growth, with upside potential if supply constraints ease. Management expects the Total Addressable Market (TAM) to effectively double from $25 billion to $50 billion by 2029 as optical connectivity expands deeper into the data center. Anticipates fiscal 2027 adjusted operating margins between 25% and 27%, reflecting significant operating leverage and the ramp of higher-margin products like Hyper-Rail. Initial customer standardization for the next-generation RLS Hyper-Rail is expected by the end of 2026, with material revenue scaling throughout 2027 and 2028. Adjusted gross margin of 46.4% included a 70 basis point benefit from one-time tariff refunds; management has reset the baseline margin goal to the mid-40s. Secured a 5-year zero-coupon convertible debt issuance to retire a 5.5% interest term loan, lowering the cost of capital while providing liquidity for supply chain investments. Management is monitoring new Canadian tariff regimes that could impact costs by approximately $10 million per quarter, though mitigation actions are underway. Cash from operations is expected to decrease in Q4 as the company disperses capital to secure long-term supply agreements for critical optical components. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is negotiating price increases ranging from high single digits to the low twenties, depending on the product line, with some increases applying to existing backlog. The 'value exchange' is a two-way commitment where Ciena secures supply for customers in exchange for improved payment terms and demand predictability. Management clarified that the $10 billion backlog is driven by actual lead times rather than speculative over-ordering; the vast majority of orders have customer request dates in 2027. Supply remains the primary bottleneck; management stated that 2027 revenue would be even higher if they could secure more components to unwind the backlog faster. Ciena believes they are largely immune to near-term fluctuations in new data center construction because existing facilities require massive capacity refreshes to support new GPUs. A major hyperscaler indicated that even if they stopped building new centers today, Ciena's demand would remain unaffected for at least two years due to existing infrastructure needs. Hyper-Rail is expected to ramp to several hundred million dollars in revenue in 2027 and will be a 'step function' improvement in margin compared to the current RLS generation. The platform is purpose-built to distribute AI training workloads across greater distances, addressing the power and density limitations of current data center architectures.

Ciena dropped 10% on in-line Q4 guidance despite a record quarter beat, while Arista gained 3% on continued AI networking momentum. Cisco held nearly flat and IYW traded higher, confirming Ciena's slide is a company-specific valuation reset, not a sector-wide unwind. Two customers drove 42% of Ciena's quarterly revenue, and its elevated valuation means the December Q4 report is the next real inflection point. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now. The report is free. Enter your email and see if any of your stocks made the cut. Ciena Corporation's (NYSE:CIEN) fiscal third-quarter beat wasn't enough to save its stock this morning. An in-line fourth-quarter revenue outlook overshadowed record results and sparked a sharp de-rating in a name that had rallied hard on the AI networking build. Interestingly, Ciena's peer-group stocks are holding firm, which makes the divergence the story of the session. Ciena stock is down 10% to $320.38, cutting into a year that had shares up 51% through the prior close. The pullback extends a rough stretch, with Ciena now down 18% over the past month. Today's move deepens a de-rating already in progress. Meanwhile, Arista Networks (NYSE:ANET) stock is up 3% to $191.65, isolating Ciena's specific guidance issue from the broader networking demand story. Meanwhile, Cisco Systems (NASDAQ:CSCO) stock is down 0.1% to $109.31. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which tracks the S&P 500 index, is up 1% to $773.17, and the iShares U.S. Technology ETF (NYSEARCA:IYW) is trading higher, so Ciena's slide isn't a broad-tape problem. Free Report, Just Released Did Any of Your Stocks Make the Top 10 List? It is an uncomfortable question, and there is now an answer to it. 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now. Open your account and look at what you own. Some of it you bought for a reason you could still defend today. Some of it you bought years ago for a reason you can no longer remember. The report is free. Put the ten next to what you own and find out which is which. Enter Your Email and See the Ten → Free from 24/7 Wall St. It lands in your inbox. Ciena reported adjusted earnings per share of $2.11 for the quarter ended August 1, 2026, against a $1.72 analyst consensus, with revenue of $1.67 billion versus a $1.63 billion estimate, up 37% from $1.22 billion a year earlier. Ciena's adjusted gross margin expanded to 46.4% from 41.9% in the prior-year period, a clean quality print behind the top-line acceleration. Ciena CEO Gary Smith stated, "Today's outstanding financial performance demonstrates Ciena's leadership in providing industry-leading, high-speed connectivity solutions as AI continues to drive compounding waves of network investment." The problem sits in the forward number. Ciena guided its fiscal fourth-quarter revenue to $1.75 billion plus or minus $50 million, a midpoint that only aligns with the $1.7 billion analyst consensus rather than clearing it. Ciena also raised its full fiscal year 2026 revenue guidance to $6.42 billion, up 35% year over year at the midpoint, but for a stock priced for acceleration, matching isn't beating, according to Ciena Corporation. Two Ciena customers together accounted for 41.7% of quarterly revenue, meaning the AI-driven demand is real but narrow, according to Ciena Corporation. Ciena CFO Marc Graff called the period a record quarter, yet that concentration weighs heavier on the Ciena multiple when the forward guide only matches expectations. That mix is what powered today's de-rating. Arista Networks stock was up 42% year to date (YTD) through the prior close and is extending gains today on continued AI fabric momentum. Arista posted Q2 FY2026 non-GAAP EPS of $1.02 on $3.04 billion in revenue in its August report, its first three-billion-dollar quarter. Management pointed to Ethernet-based AI networking as a durable share opportunity, with a full-year revenue outlook of approximately $12.6 billion. Cisco stock was up 44% year to date through the prior close after booking $4 billion in AI infrastructure orders in Q4 FY2026 and guiding fiscal 2027 AI infrastructure revenue to $7.5 billion. Cisco characterized the environment as a networking supercycle. Arista Networks and Cisco holding firm while Ciena resets is the cleanest evidence that this is a company-level issue, not a sector verdict. The table sets today's session move against the YTD anchor through the prior close for each covered name. Ciena's reset stands out against modest peer gains. Ciena's preliminary fiscal 2027 outlook calls for at least 30% revenue growth on a backlog of $8.5 billion exiting Q3 FY2026, so the December fourth-quarter report becomes the next real inflection point for the stock. Management framed the environment as a multi-year, supply-constrained investment cycle. That keeps the debate about pace and share rather than direction. Position sizing in Ciena shares should account for both the customer concentration and the tendency of supply-constrained networking names to trade on incremental order signals rather than trailing beats. A moderate approach makes sense while the guide-versus-consensus gap sorts out. Ciena's elevated valuation raises the bar for any forward number, and today's tape shows what happens when it isn't cleared. The broader read is that AI networking demand remains intact, with Arista Networks and Cisco both carrying rich YTD gains. Follow-through in those two names during the afternoon session may indicate whether today's Ciena move stays contained or spreads to peers. Ultimately, the IYW ETF trading higher today reinforces the containment case rather than a sector-wide unwind. If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research point to as the 10 best stocks to buy right now, and it's free. Read more here and >;elm:context_link;itc:0;sec:content-canvas" data-yga="{"yLinkElement":"context_link","yModuleName":"content-canvas","yLinkText":"see which stocks made the cut -->"}" class="link ">see which stocks made the cut -->> Contact [email protected] for any questions or corrections.

This article first appeared on GuruFocus. Revenue: $1.67 billion, a quarterly record, up 37% year-over-year and at the top end of guidance. Adjusted Gross Margin: 46.4%, exceeding the top end of guidance by 90 basis points and up 450 basis points year-over-year, positively impacted by ~70 basis points from tariff refunds. Adjusted Operating Margin: 22.5%, a record high, exceeding guidance by 250 basis points and more than doubling year-over-year. Adjusted EPS: $2.11, a record, up 215% year-over-year. Adjusted Operating Expense: $400 million, at the low end of guidance. Free Cash Flow: $116 million generated in Q3. Backlog: Increased by $800 million in Q3 to $8.5 billion; expected to exceed $10 billion by fiscal year-end. Optical Networks Revenue (including interconnects): Grew over 45% year-over-year, with RLS and Waveserver systems each growing over 55%. Interconnects Revenue: More than doubled year-over-year. Direct Cloud Provider Revenue: Grew over 80% year-over-year. Share Repurchases: Repurchased 356,000 shares for $172 million in Q3. Cash and Equivalents: $2.8 billion at the end of Q3. Q4 FY2026 Guidance: Revenue of $1.75 billion ($50 million); adjusted gross margin of 45% (50 basis points); adjusted operating expense of roughly $415 million ($10 million); adjusted operating margin of approximately 20% (50 basis points). Fiscal 2027 Early Outlook: Revenue growth of at least 30% year-over-year, yielding at least $8.3 billion to $8.4 billion; gross margins of at least 45% to 46%; adjusted operating margin between 25% and 27%. Warning! GuruFocus has detected 4 Warning Signs with CIEN. Is CIEN fairly valued? Test your thesis with our free DCF calculator. Release Date: September 03, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record Q3 fiscal 2026 revenue of $1.7 billion, up 37% year-over-year, with adjusted EPS of $2.11, up 215%. Adjusted operating margin of 22.5% exceeded guidance and more than doubled year-over-year, marking the highest ever for Ciena Corp (NYSE:CIEN). Strong demand with Q3 book-to-bill significantly greater than one, leading to a substantial backlog increase to $8.5 billion, expected to exceed $10 billion by fiscal year-end. WaveLogic 6 Extreme remains the only 1.6 terabit high-performance modem on the market, with adoption outpacing the prior generation WaveLogic 5e. Fiscal 2027 preliminary guidance projects at least 30% revenue growth to $8.3-$8.4 billion, with adjusted operating margin expected between 25% and 27%. Secured long-term supply agreements through 2029 for critical components, enhancing supply security to meet multiyear demand. Interconnects revenue more than doubled year-over-year, with 800 ZR plug shipments more than doubling sequentially. RLS Hyper-Rail, co-created with hyperscalers, is on track for standardization by end of 2026, with a ramp to several hundred million dollars in fiscal 2027. Direct cloud provider revenue grew over 80% year-over-year, with in-and-around data center revenue quadrupling year-to-date. Successfully raised prices across product lines, with increases ranging from high single digits to high teens/low 20s, contributing to margin expansion. Supply constraints remain a significant bottleneck, limiting the ability to fully meet customer demand and potentially capping revenue growth. Cash conversion stepped back quarter-on-quarter due to working capital investments, with Q4 cash from operations expected to decline as supply agreements are funded. Adjusted gross margin of 46.4% was positively impacted by a one-time tariff refund of about 70 basis points, which is not expected to continue. New Canadian tariff regime could impact the company by approximately $10 million per quarter, though mitigation actions are being explored. The company faces ongoing challenges in balancing supply and demand, with backlog extending into fiscal 2028 and beyond, indicating prolonged lead times. Operating expenses are expected to rise in fiscal 2027, with reinvestment of one-time variable compensation and increased investment in line systems and interconnect portfolio. The bespoke consumption model for WaveLogic 6e with a major hyperscaler involves custom development, which may limit scalability and margin predictability. DCOM (data center optical modules) revenue is lumpy due to customer concentration, which could cause quarterly volatility. The company's reliance on a few large customers (two customers each >10% of revenue) poses concentration risk. Despite strong demand, the company's ability to grow revenue is constrained by component supply, with fiscal 2027 guidance described as a 'floor' subject to supply-driven upside. Q: Can you provide more detail on the "value exchange" discussions with customers, specifically regarding price increases and the alignment of demand terms and conditions? A: Marc Graff (CFO): We've had conversations with customers across different product lines, expecting price increases anywhere from high single digits to the high teens or low 20s, depending on the customer and product line. Some of this will selectively hit backlog. The second pillar involves a two-way discussion on conditions, where we are on the hook to deliver what we say, but we expect reciprocity from customers, covering aspects like payment terms and fill rates. It's a holistic conversation about value exchange, not just price. Q: Given the massive backlog growth, can you help us understand the early ordering portion of the backlog and how it could behave in 2027? A: Gary Smith (CEO): The backlog is almost entirely driven by lead times, not speculative buying. The demand is absolutely there. We expect to exit fiscal 2026 with over $10 billion in backlog, and our preliminary revenue guide of $8.3 to $8.4 billion for 2027 is a floor. It would be greater if supply were greater. Marc Graff (CFO): Demand doubled from '24 to '25 and is expected to increase another 50% from '25 to '26. We are constrained by the industry's need to add significant capacity. We don't see supply and demand getting back into balance before '28. Q: Can you discuss the durability of demand in light of potential pacing issues with data center construction? A: Gary Smith (CEO): We have unique insight as the #1 player in data center connectivity. A hyperscaler told us that if they stopped building data centers tomorrow, we probably wouldn't notice for two years because they must connect existing assets and refresh GPUs, which requires massive additional connectivity. Our backlog is largely for data centers that are already there. For the next couple of years, we believe we are largely immune from the pacing of new data center construction. Q: Can you provide an update on the Hyper-Rail product ramp and its economics relative to the prior generation RLS? A: Marc Graff (CFO): We are on track for standardization by the end of calendar 2026, with a ramp in fiscal 2027 to several hundred million dollars. The economics are a step function improvement over RLS, which has already seen margin improvements over the last four to eight quarters. Hyper-Rail will be accretive to the company as a whole once we get into '27, '28, and '29. Q: Regarding the performance optics consumption model, is this a bespoke arrangement with one customer, and how does it fit into the interconnect family? A: Scott McFeely (Executive Advisor): The specific opportunity of taking our WaveLogic Extreme family and offering it in a different consumption model is bespoke to individual customers. We have two examples today, including one announced last quarter. These are very unique custom developments for how those customers want to deploy them, and our relationships reflect that. We make the technology available however our customers want to consume it. Q: Can you elaborate on the fiscal 2027 operating margin guidance of 25% to 27% and the mechanics around operating expenses? A: Marc Graff (CFO): We are in the middle of our annual planning process. This year, we'll spend roughly $1.6 billion, which includes onetime variable compensation. We are going to reinvest that onetime expense, so the "flat" OpEx is misleading as we are looking at $100 million more of investment. We will also see a little more investment in line systems and our interconnect portfolio. Q: Can you discuss the customer composition, specifically regarding new "neoscalers" and your ability to grow the customer list? A: Gary Smith (CEO): About 50% of our business is now directly with hyperscalers. Increasingly, we are seeing "neoscalers" lean heavily into networking, securing networks on MOFN deals and putting in their own fiber. We are taking more than our fair share of that market as it grows, both in the U.S. and globally. We expect this to become an increasingly important part of our business through '27 and '28. Q: Can you provide color on the demand inflection across your portfolio and how much of fiscal 2027 is already covered by backlog? A: Gary Smith (CEO): We are seeing broad demand across the portfolio, including line systems (both RLS and Hyper-Rail), modems (WaveLogic 6), and submarine networks. We are seeing strong growth in MOFN deals globally, particularly in India and the Middle East. Unidentified Company Representative: The vast majority of the $10 billion backlog has customer request dates in '27, meaning they would take it if we could give it to them. The backlog covers most of the '27 guide. Q: What is your take on the Coherent-Lite market moving inside the data center and the potential for optical circuit switching (OCS)? A: Scott McFeely (Executive Advisor): We believe Coherent moving inside the data center is inevitable. We think the right intercept for the general market is at 3.2 terabits, and we will be in a great position to be a leader. We love OCS because it drives adoption of coherent optics inside the data center faster. However, we are not commenting on whether we will enter the OCS market ourselves. Q: Can you discuss the prospects for accelerating revenue growth in fiscal 2027 and what things might look like if supply constraints were relaxed? A: Marc Graff (CFO): All of our focus is on getting more supply to meet demand. The $8.3 to $8.4 billion guide is a floor and would be higher if we could get more supply. We are accelerating growth from '24 to '25 to '26 and into '27. A year ago, we guided '26 to grow 17%, and we are now at 35%. We want to give a floor we can achieve while we continue to work on supply. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Earnings estimates for Corning Incorporated GLW for fiscal 2026 and fiscal 2027 have moved up 2.51% to $3.27 and 1.66% to $4.28, respectively, over the past 60 days. The positive estimate revision depicts bullish sentiment about the stock’s growth potential. Image Source: Zacks Investment Research Optical Communications has emerged as Corning’s major growth engine. In the second quarter, the segment’s sales increased 32% year over year to $2.07 billion, while segment net income jumped 77% to $438 million. The uptick is backed by rapid AI infrastructure buildout.Corning is expanding collaboration with some of the world’s largest tech companies. It has inked a multiyear, multibillion-dollar agreement with Amazon. Per the deal, Corning will provide optical fiber, cable and connectivity products for Amazon’s expanding U.S. data-center infrastructure. The company also announced a long-term partnership with NVIDIA to expand U.S.-based optical connectivity manufacturing capacity by 10 times and increase domestic fiber production capacity by more than 50%.Corning’s Glass Innovations business is benefiting from its premium positioning and product innovation. The company expects Gorilla Glass sales to outperform the broader handheld market despite pressure from higher memory prices. TV manufacturers and panel makers are increasingly shifting towards larger and higher-priced televisions. This is likely to create a favorable opportunity for Corning’s Display Business.Corning continues to enhance its financial profile under the Springboard initiative. The company has raised the ambition of its Springboard strategy, targeting an annualized sales run rate of $20 billion by the end of 2026, $30 billion by the end of 2028 and $40 billion by the end of 2030. Management expects sales to witness a 19% CAGR from the fourth quarter of 2026 through the fourth quarter of 2030, with earnings growing faster than sales. Demand softness in the handheld device market remains one of the key near-term challenges for the company. Management expects higher memory prices to push smartphone industry unit volumes down by a mid-teens percentage in 2026. Despite the company’s expectation of outperforming the market, demand for Gorilla Glass will likely be impacted by lower handset volume.Corning maintains a sizeable presence in China, which exposes the company to geopolitical tensions and tariff- related uncertainty. The Display and consumer electronics businesses remain dependent on Chinese panel makers and manufacturing ecosystems. Escalating trade restrictions, tariff increases or supply-chain disruptions between the United States and China could adversely affect operating margins, production efficiency and customer demand. Stiff competition can limit growth potential. Competition from companies such as Amphenol APH and Ciena Corporation CIEN may increase pressure on pricing.Corning's growing AI infrastructure exposure enhances growth but increases reliance on a small number of large customers. In second-quarter 2026, contract liabilities totaled $2.7B and included a $1B customer deposit tied to a long-term AI infrastructure supply agreement, highlighting concentration risk even as it supports near-term visibility. Corning shares have gained 104% in the past year compared with the communications components industry’s growth of 157.1%. The stock has outperformed the S&P 500 indexduring this period. Image Source: Zacks Investment Research It has underperformed its competitor, Ciena, but outperformed Amphenol. Ciena has gained 179.1%, while Amphenol has declined 28.4%. From a valuation standpoint, GLW is currently trading at a premium compared with the industry. Going by the price/earnings ratio, the company’s shares currently trade at 36.51 forward 12-month earnings, higher than 35.16 for the industry. Image Source: Zacks Investment Research Growing exposure to AI infrastructure and expanding optical content per AI system are major growth drivers for Corning. Focus on product diversification and exposure to various markets such as solar, automotive and display boost resiliency in the business model. Strong demand for Gorilla Glass is a positive. However, weakness in the smartphone market, high customer concentration risks and growing geopolitical volatility remain major concerns. With a Zacks Rank #3 (Hold), Corning seems to offer a balanced investment outlook, suggesting that investors may want to exercise caution when considering the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Corning Incorporated (GLW) : Free Stock Analysis Report Ciena Corporation (CIEN) : Free Stock Analysis Report Amphenol Corporation (APH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

GitLab GTLB reported second-quarter fiscal 2027 non-GAAP earnings of 24 cents per share, which remained unchanged year over year and 33.33% above the Zacks Consensus Estimate. Revenues of $286.25 million rose 21.3% year over year and beat the consensus mark by 4.74%.Broad-based strength across new and existing customers supported the quarter. Net annual recurring revenue (ARR) growth accelerated to 42% year over year, while the dollar-based net retention rate was 117%. Subscription, self-managed and SaaS revenues increased 21.5% year over year to $258.31 million. License, self-managed and other revenues rose 20.1% year over year to $27.94 million. GitLab Inc. price-consensus-eps-surprise-chart | GitLab Inc. Quote SaaS revenues represented 34% of total revenues and increased 36% year over year. Calculated billings grew 24%, while total remaining performance obligations rose 16% to $1.2 billion and current RPO increased 20% to $744.7 million. Customers generating more than $5,000 of ARR reached 11,114, up 8% year over year. Customers with more than $100,000 of ARR increased 17% year over year to 1,571. Ultimate ARR grew roughly 35% and accounted for 59% of total ARR. Eight of GitLab’s 10 largest second-quarter deals purchased Ultimate, while gross retention remained above 90%.GitLab recorded approximately 1,700 first orders, more than double the year-ago level, while first-order net ARR increased 39%. Deals worth at least $500,000 grew more than 150% year over year. Account executive capacity increased about 30%, while productivity per rep improved about 10%. GitLab Flex attracted more than 130 customers with over $20 million in commitments during its first six weeks in market. Paid consumption run rate exceeded $40 million at quarter-end, up from $15 million exiting the first quarter. Management is targeting more than $100 million by fiscal year-end.Duo Agent Platform paid consumption run rate increased roughly 50% sequentially. GitLab Orbit, which entered public beta in June, had more than 2,200 organizations enabled indexing and generated more than 170,000 customer queries. Roughly 80% of query volume came from customers connecting Orbit to external agents. In the second quarter of fiscal 2027, non-GAAP gross margin was 86%, down from 90% in the prior year. On a non-GAAP basis, sales and marketing expenses rose 15.8% year over year to $103.82 million, research and development costs increased 24.6% year over year to $65.17 million, and general and administrative expenses advanced 19.1% year over year to $36.00 million.Non-GAAP operating income increased 7.6% year over year to $42.57 million. However, the corresponding operating margin was 15%, down from 17% in the year-ago quarter. As of July 31, 2026, cash and cash equivalents and short-term investments were $1.26 billion compared with $1.36 billion as of April 30, 2026.Operating cash outflow was $3.09 million compared with operating cash flow of $49.37 million in the year-ago quarter. Adjusted free cash flow declined to $9.75 million from $46.45 million.The company repurchased approximately 3.5 million shares during the quarter and had about $245 million remaining under its current authorization. For the third quarter of fiscal 2027, GitLab expects revenues of $281-$283 million, implying 15%-16% year-over-year growth. Non-GAAP operating income is projected to be $35-$37 million, while non-GAAP earnings are expected to be between 19 cents and 20 cents per share.For fiscal 2027, revenues are now projected to be $1.129-$1.133 billion, representing 18-19% growth. Non-GAAP operating income is expected to be $148-$152 million, and earnings are likely to be between 85 cents and 87 cents per share. The outlook assumes a normalized bookings pace, modest Duo Agent Platform revenue contribution and excludes the potential revenue-timing impact of Flex. Management estimates a maximum $13 million fiscal 2027 revenue-timing impact from Flex adoption. GitLab currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader Zacks Computer and Technology sector include Ciena CIEN, Docusign DOCU and Micron Technology MU. Each stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.Ciena shares have surged 268.4% in the year-to-date period. Ciena is set to report third-quarter fiscal 2026 results on Sept. 3.Shares of Docusign have plunged 13.3% year to date. Docusign is set to report second-quarter fiscal 2027 results on Sept. 3.Shares of Micron Technology have rallied 129.9% year to date. Micron Technology is slated to report fiscal fourth-quarter 2026 results on Sept. 30. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GitLab Inc. (GTLB) : Free Stock Analysis Report Ciena Corporation (CIEN) : Free Stock Analysis Report Micron Technology, Inc. (MU) : Free Stock Analysis Report Docusign Inc. (DOCU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Thursday is going to be an important day for Ciena (NYSE:CIEN) investors, as it's when their company unveils a fresh quarterly earnings report. Not for the first time, hopes are high for the tech hardware maker. It's one of the better-known equipment suppliers helping to feed the feverish build-out of artificial intelligence (AI) compute. As such, analysts are -- again -- predicting extremely robust growth. Ciena has a recent history of not only hitting that mark but also beating the consensus estimates of those prognosticators. This, however, didn't help its stock rise after the previous earnings report. Here's what might get the shares to defy gravity this time around. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Image source: The Motley Fool. Ciena is scheduled to publish its fiscal 2026 third-quarter results and host a conference call to discuss them before market open on Thursday. It'll be broadcasting to an investment community that continues to expect much from the company. The consensus analyst revenue estimate for the quarter is $1.64 billion. That's a robust 34% above the same period of 2025, although it sits at nearly the midpoint of the company's guidance range of almost $1.58 billion to nearly $1.68 billion. A higher bar for Ciena to clear will be net income not in accordance with generally accepted accounting principles (non-GAAP, or adjusted). This is expected to soar by 158% -- wow! -- to $1.73 per share. The company hasn't provided guidance for this metric. Ciena is quite the grizzled veteran in the optical networking components niche. The current boom in its business is driven by products that enable extremely high-speed data transfers, which are crucial for resource-intensive AI capabilities. That explains the rosy third-quarter projections from both analysts and company management. Yet the gap between revenue and adjusted profitability growth is striking. This is based on recent history; Ciena has done an effective job of designing increasingly more cost-effective products. It's also enacted strategic price increases from time to time, which isn't a challenge in such a demand-heavy environment. Another factor at work is Ciena's shift toward more state-of-the-art, premium products with relatively high price tags. The company's GAAP gross margins tell the tale. Over the past five quarters, they've risen steadily but surely, from 40.2% in the second frame of fiscal 2025 to 44% in the same period of 2026. I need to emphasize that after Ciena reported its latest earnings (for the fiscal second quarter) in early June, it was hit by an aggressive sell-off by investors. Its stock still hasn't come close to recovering from this. That's usually not what happens when a company posts a beat-and-raise quarter marked by skyrocketing growth in core fundamentals. To me, that sharply negative reaction was due to two factors. One was the extreme run-up in the company's shares, which had risen 165% year-to-date as of the day before the earnings release. At that point, it became clear to many that the company was a star pick-and-shovel play on the AI revolution. Investor expectations, then, were sky-high, to the point that only an absolute blowout of a quarter would have sustained that momentum. Major factor No. 2 was the performance of Broadcom (NASDAQ:AVGO), a bellwether for AI adoption (as it's the top designer of custom AI chips favored by many prominent developers). Broadcom reported its own fiscal second-quarter figures a mere two days before Ciena, and the dynamic was similar. A sustained stock rally had left Broadcom richly priced, and despite record results, powerful growth, and meaty margins its stock tumbled. In retrospect, nothing short of a real stunner on the upside was likely to push it higher. So the good news for Ciena is that the pressure has eased since those peak share price days (and I mean that, as its equity hit a more than 25-year high before the offending second-quarter release). At this point, folks are looking for good reasons to believe in the stock again. I think the company will deliver. After all, it notched earnings beats on lofty analyst estimates in all four of its trailing quarters. And it's not like demand for crucial AI components is fading at all; in fact, the opposite is true. I believe many investors will be looking for yet another raise in guidance, either of the quarterly or (preferably) the annual variety. This has become habitual, too, and the stock might sink if this doesn't occur. I'm cautiously optimistic here. I think investors won't be as demanding of Ciena as they were in the run-up to the second-quarter print, and its shares will see a lift. However, the company will have to post yet another impressive performance; no matter how strong a business or how favorable its environment, that's never an easy accomplishment. Before you buy stock in Ciena, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ciena wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $437,097!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,355,077!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of September 1, 2026. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom and Ciena. The Motley Fool has a disclosure policy. Ciena's Next Earnings Report on September 3 Could Send the Stock Soaring. Here's Why. was originally published by The Motley Fool

Most investors have never heard of Ciena. Most investors also don’t know what actually powers the Internet’s massive highway system. Ciena builds the engines that drive it. And right now, the world needs more of them than it can get. The 34-year-old Hanover, Maryland, company makes high-speed optical networking equipment. Those are the specialized hardware and software that shoot data across long distances at the speed of light. Telecommunications companies, cloud giants, and governments all depend on them. And with AI data centers multiplying faster than power grids can handle them, the demand for Ciena’s technology is accelerating in ways that weren’t fully visible even 18 months ago. Ciena reports fiscal Q3 2026 results on Sept. 3. Morgan Stanley shared a preview note laying out exactly what to watch and why the results might be more important than the headline numbers suggest. The firm maintains an Equal-Weight rating with a $490 price target, according to a note shared with TheStreet. That’s not a ringing buy call. But it’s a constructive setup heading into a print the firm explicitly describes as having “positive catalysts.” Also Read: Ciena Corporation Latest News and Stories Here’s the dynamic at the centre of the Ciena story, and it’s worth understanding before the Sept. 3 numbers land. Ciena is not supply-constrained because demand is weak. It’s supply-constrained because demand is outrunning its ability to source optical components, particularly pump lasers, which are critical to its networking hardware. Lumentum (LITE) is one of Ciena’s key suppliers, and LITE reported pump-laser shipments up more than 80% year over year last quarter, with plans to increase volumes roughly fourfold over the coming quarters, according to the Morgan Stanley note. New long-term agreements between suppliers and Ciena should improve supply visibility, but not in time to meaningfully impact Q3. More AI: Nvidia just made a move Wall Street wasn’t ready for Microsoft just took sides in AI policy fight OpenAI just disclosed something genuinely alarming What that means for you as an investor is that the revenue number matters less than the backlog number. Backlog represents orders Ciena has won but can’t yet ship due to component constraints. In Q2, backlog grew by $600 million. Morgan Stanley expects Q3 backlog growth to exceed that figure, according to the note. If it does, it would signal that the demand is accelerating even as near-term revenue conversion remains limited. My read is that a backlog beat is the most important signal in this print. It offers an early look at what fiscal 2027 revenue could look like before supply constraints fully normalize. According to Morgan Stanley’s note, its specific Q3 bogeys are approximately $1.69 billion in revenue, a 45.5% gross margin, and a 21% operating margin. A clean print also requires Q4 guidance of approximately $1.73 billion in revenue with similar margin parameters. Here’s the part of the Morgan Stanley thesis that I find most interesting, and most underappreciated by the market. Everyone knows AI data centers require enormous amounts of connectivity. The conventional assumption is that this means building massive centralized campuses. Morgan Stanley’s thematics team is pushing back on that assumption, according to the note. Related: Morgan Stanley resets CIEN stock target after earnings Political opposition and power constraints are rising non-linearly with campus size. The bigger the proposed campus, the harder it becomes to permit and power it. The result, according to the note, is that workloads may increasingly be distributed across smaller, geographically dispersed sites, which then need to be interconnected over long-haul optical networks. That’s exactly what Ciena builds. If the mega-campus model hits structural limits, the scale-across optical networking opportunity doesn’t shrink. It potentially expands. The Nvidia long-haul network build reinforces this thesis. Nvidia’s infrastructure project includes more than 8,000 miles of new fiber across 16 U.S. routes and targets 15,000 new route miles through 2030, according to Morgan Stanley’s note. Ciena is well-positioned to capture equipment orders as those routes are lit. Morgan Stanley estimates the total CIEN opportunity from this build at less than $1 billion over multiple years. That’s roughly one-quarter to one-third the size of Lumentum’s deals with Meta and Microsoft, with initial deployments expected as early as 2027, according to the note. It’s not a near-term catalyst. But it’s a real, named pipeline item that the Street hasn’t fully modeled. Ciena’s most recent quarter, reported June 4, was genuinely impressive. Revenue reached $1.57 billion, up 40% year over year (YoY). Adjusted EPS came in at $1.64, up 290% YoY. The company raised its full-year fiscal 2026 revenue guidance to $6.3 billion, representing 32% YoY growth at the midpoint. CEO Gary Smith mentioned this in Ciena’s Q2 statement. “Our long-term strategy to be the global leader in high-speed connectivity is tightly aligned to the structural, multi-year opportunities created by AI-driven demand.” Ciena’s own guidance calls for $1.625 billion in revenue, an adjusted gross margin of around 45%, and an operating margin between 19% and 20%. Morgan Stanley’s bogey of $1.69 billion sits above that guidance midpoint. The firm is modeling upside relative to management guidance, according to Ciena’s Q2 statement. CIEN shares were trading at $378.44, down 5.35% on the week ended Aug. 28, but up 61.82% year to date and 286.60% over the past year, according to Yahoo Finance. Morgan Stanley’s $490 target, based on 37x its 2028 EPS estimate of $13.26, implies roughly 29% upside from current levels. The Equal-Weight rating reflects near-term caution on optical sector multiples, not a fundamental concern about the business. The Sept. 3 print gives us the chance to see whether the backlog inflection Morgan Stanley expects actually shows up in the numbers. Related: Morgan Stanley rattles investors with bombshell HP stock verdict This story was originally published by TheStreet on Aug 31, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.