Buy 3 Communication Components Stocks Flying High on Massive AI Boom

The Communication Components industry appears well poised to benefit from healthy demand trends and an increasing user propensity to stay abreast of the latest digital innovations. As both consumers and enterprises are using networks more extensively, there is tremendous demand for quality networking components.

The Zacks-defined Communication Components industry is currently in the top 23% of the Zacks Industry Rank. In the past year, the industry has provided an impressive 112% return, while its 3-month return is 29.3%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect the Communication Components industry to outperform the market over the next three to six months.

Here, we recommend three communication components stocks that skyrocketed in 2025 and have more upside left this year. These are: Ciena Corp. CIEN, Lumentum Holdings Inc. LITE and Corning Inc. GLW. Our picks currently carry either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our three picks in the past six months.

Ciena Corp.

Zacks Rank #1 Ciena’s fiscal fourth-quarter results reflected 20% year-over-year top-line gains, 69.5% EPS growth and a record $5 million order backlog, driven by accelerating AI-led demand from cloud and service provider customers. Driven by strong cloud and service provider momentum, CIEN gained 2 points of optical market share in 2025 and expects further gains in 2026. 

Networking Platforms revenues rose 22% to $1.05 billion, driven by 19% Optical growth on a 72% RLS surge and 49% growth in Routing and Switching from DCOM demand. CIEN lifted its fiscal 2026 revenue outlook to $5.7-$6.1 billion, nearly 24% growth at the midpoint, up from the prior 17%, on strong demand from cloud, DCI and AI infrastructure.

Increased network traffic, higher demand for bandwidth and the adoption of cloud architectures remain key growth drivers as the company expects to improve its profitability with a balanced mix of new and existing customers. CIEN’s portfolio, including WaveLogic, RLS, Navigator, and Interconnect Solutions, remains a recognized industry standard, with WaveLogic 6 and RLS giving it an 18–24 months technology lead and strong positioning to serve global AI network opportunities.  

Ciena has an expected revenue and earnings growth rate of 24.2% and more than 100%, respectively, for the current year (ending October 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 2.1% in the past 30 days.

Lumentum Holdings Inc.

Zacks Rank #2 Lumentum Holdings designs and manufactures optical and photonic technologies for high-speed telecommunications, data centers, and advanced manufacturing. LITE provides components, such as transceivers and lasers for fiber-optic networks, supporting the rapid growth of artificial intelligence, cloud computing, 5G connectivity, and beyond.

LITE’s industrial lasers are used in precision manufacturing, such as cutting semiconductors and solar cells. LITE also develops 3D sensing laser diodes for applications like facial recognition in smartphones and autonomous vehicle sensors.

Shares of Lumentum have gathered momentum in the past three months boosted by growing AI demand. LITE is developing and providing photonic solutions for AI applications, particularly for data centers. LITE’s major AI-enabled offerings are high-speed transceivers, optical circuit switches, and lasers that enable faster, more efficient, and scalable AI infrastructure. 

Moreover, LITE has a strong collaboration with NVIDIA Corp. NVDA for developing NVDA’s silicon photonics ecosystem, especially for deploying the latter’s Spectrum-X Photonics networking switches.

Lumentum Holdings has an expected revenue and earnings growth rate of 56% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.2% over the past 60 days.

Corning Inc.

Zacks Rank #2 Corning continues to focus on developing state-of-the-art cover materials, which have been deployed on more than 8 billion devices. Samsung has opted to deploy Corning Gorilla Armor 2 cover material for its latest Galaxy S25 Ultra devices.

GLW offers several products focused on the data center, with a portfolio consisting of optical fiber, hardware, cables and connectors, enabling it to create optical solutions to meet evolving customer needs. This augurs well for its long-term growth. 

The growing adoption of innovative optical connectivity products for generative AI applications is expected to be a key growth driver for GLW in the upcoming quarters. Since both consumers and enterprises are using networks more extensively and the data thus generated is increasingly being used to train AI models, there is tremendous demand for quality networking. 

Additionally, data consumption patterns are changing, with a growing propensity to consume video content, creating the need for faster data transfer. Since optical networks are more efficient and most existing networks are copper-based, the demand for GLW’s optical solutions is particularly strong.

Corning has an expected revenue and earnings growth rate of 11.2% and 20%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1% in the last 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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