CIEN Acquires Nubis: How it Turns Buyouts Into Competitive Advantage

Ciena Corporation CIEN has taken a decisive step to strengthen its position in the rapidly evolving data center market by acquiring Nubis Communications, a privately held interconnect technology innovator. Purchased at $270 million in an all-cash transaction, the deal highlights Ciena’s ambition to address the surging demand for scalable, high-performance, and energy-efficient connectivity, driven by the explosive growth of AI workloads.

Nubis’ technology portfolio complements Ciena’s existing high-speed interconnects and adds critical capabilities within the data center. Nubis’ CPO/NPO and ACC technologies augment Ciena’s in-data-center capabilities by delivering ultra-high-bandwidth, low-power optical and copper interconnects optimized for AI-scale workloads. Combined with Ciena’s high-speed SerDes, these solutions enable efficient intra- and inter-rack connectivity, positioning CIEN deeper within the data center fabric that powers next-generation AI infrastructure. The acquisition brings highly skilled engineers with deep expertise in optical and electrical interconnects into Ciena’s R&D organization.

Ciena continues to acquire companies that fill technology gaps, expand markets, and enhance platforms, turning these targeted acquisitions into growth, revenues, and competitive advantage. It is increasing capacity to support metro and edge strategies, boosted by acquisitions like Tibit, Benu, and AT&T’s Vyatta. It targets growth in 5G and cloud networks through routing and switching, backed by the industry’s largest optical R&D and a world-class, customer-focused sales force.

Its high-performing Blue Planet division was formed from the 2015 Cyan Networks acquisition, combining Cyan’s software with Ciena’s SDN/NFV controllers to create an open, multi-vendor network automation platform, later enhanced through acquisitions like Packet Design and Centina for advanced analytics and closed-loop automation. We expect this unit to generate $181.6 million in revenues in fiscal 2026, representing a 57% year-over-year increase.

Ciena raised its fiscal 2026 outlook, expecting $5.7-$6.1 billion in revenues or roughly 24% growth at the midpoint, up from the 17% on strong cloud, DCI, and AI demand. Cost and pricing actions should boost second-half margins, with adjusted opex flat at $1.52 billion, including Nubis’ operating costs post buyout.

Who’s Challenging CIEN? A Look at Its Competitors

Cisco Systems, Inc.CSCO benefits from an expanding security product portfolio and the completion of the Splunk acquisition in 2024. Splunk's acquisition enhances the company’s recurring revenue base. The buyout significantly expands Cisco’s portfolio of software-based solutions, contributing more than $4 billion in ARR and making it one of the largest software companies in the world. Cisco’s growth strategy targets market transitions through acquisitions in three areas: market acceleration, expansion, and new entry. It seeks companies with talent, technology, or new business models capable of reaching billion-dollar markets. Further, data center switching orders jumped into double digits year over year in the fiscal third quarter, implying strong demand.

Arista Networks, Inc. ANET continues to benefit from the expanding cloud networking market, which is driven by the strong demand for scalable infrastructure. It has made several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. The acquisition of Awake Security, a Network Detection and Response platform provider that combines AI with human expertise to autonomously hunt and respond to insider and external threats, has expanded its cognitive campus portfolio with new platforms. In 2025, Arista unveiled AI-driven enterprise products, expanding switching, Wi-Fi 7 and WAN capabilities, and acquired Broadcom’s VeloCloud SD-WAN portfolio. These innovations enable zero-touch operations, proactive monitoring and automated troubleshooting across client-to-cloud networks.

CIEN Price Performance, Valuation and Estimates

Shares of CIEN have surged 42.6% in the past three months compared with the Communications - Components industry’s growth of 22.3%.

CIEN trades at a forward 12-month price-to-earnings (P/E) ratio of 52.44, above the industry’s 33.28.

The Zacks Consensus Estimate for CIEN earnings for fiscal 2026 has been revised upward over the past 60 days.

CIEN currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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