Ciena Corporation (CIEN) Delivered an Outstanding 176% Return

Riverwater Partners, an investment management company, released its “Sustainable Value Strategy” Q4 2025 investor letter. A copy of the letter can be downloaded here. The Strategy underperformed the Russell 2500 Index during the fourth quarter as well as for the full year. Stock selection drove the underperformance of the Strategy in the quarter. The Strategy’s emphasis on high-quality stocks lagged behind broader market trends. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Riverwater Partners Sustainable Value Strategy highlighted Ciena Corporation (NYSE:CIEN) as the top contributor to performance. Ciena Corporation (NYSE:CIEN) is a network technology company that offers hardware, software, and services for network operators. On January 22, 2026, Ciena Corporation (NYSE:CIEN) stock closed at $230.03 per share. One-month return of Ciena Corporation (NYSE:CIEN) was -4.82%, and its shares gained 138.08% of their value over the last 52 weeks. Ciena Corporation (NYSE:CIEN) has a market capitalization of $32.447 billion.

Riverwater Partners Sustainable Value Strategy stated the following regarding Ciena Corporation (NYSE:CIEN) in its fourth quarter 2025 investor letter:

"Ciena Corporation (NYSE:CIEN) was the top performer for the year with a remarkable 176% return. As a leading supplier of optical communications infrastructure, CIEN grew its revenue and EPS during 2025 as its equipment was deployed by the major hyperscalers and telecom service providers to enable movement of data within AI datacenter networks. CIEN’s leading position and large backlog should enable the company to continue to benefit from this trend, particularly given that networking is a new key bottleneck for deploying AI widely. We trimmed our CIEN position several times during 2025 when its weight grew above 5%."

Ciena Corporation (NYSE:CIEN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 70 hedge fund portfolios held Ciena Corporation (NYSE:CIEN) at the end of the third quarter, which was 57 in the previous quarter. Ciena Corporation (NYSE:CIEN) reported revenue of $1.35 billion in the fourth quarter of fiscal 2025, exceeding expectations and marking nearly a 20% year-over-year growth. While we acknowledge the potential of Ciena Corporation (NYSE:CIEN) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Ciena Corporation (NYSE:CIEN) and shared Munro Global Growth Fund's views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.