Ciena (CIEN) Soars 7.3%: Is Further Upside Left in the Stock?

Ciena (CIEN) shares ended the last trading session 7.2% higher at $271.32. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.3% gain over the past four weeks.

The increase in share price can be attributed to increased network traffic, demand for bandwidth and the adoption of cloud architecture. Ciena is set to join the S&P 500. The index news is hitting at a time when sentiment on optical networking is already improving (AI traffic, data-center interconnect demand, expectations of a telecom capex recovery). That amplifies the stock reaction.

As cloud operators and service providers modernize their networks aggressively, Ciena’s product portfolio remains key to supporting the bandwidth-intensive, low-latency requirements of AI models and data center interconnects. Ciena’s strategy also emphasizes operational efficiency, consistent share repurchases, strong free cash flow and a foothold in AI and cloud networking. All these factors contribute to a strong long-term financial outlook. With increasing momentum among cloud and service providers, Ciena has gained two points of optical market share year to date in the last reported quarter and is well-positioned for further growth in 2026.

This developer of high-speed networking technology is expected to post quarterly earnings of $1.13 per share in its upcoming report, which represents a year-over-year change of +76.6%. Revenues are expected to be $1.39 billion, up 29.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Ciena, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CIEN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Ciena is part of the Zacks Communication - Components industry. Ooma (OOMA), another stock in the same industry, closed the last trading session 1.9% higher at $11.86. OOMA has returned 1% in the past month.

For Ooma, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.31. This represents a change of +47.6% from what the company reported a year ago. Ooma currently has a Zacks Rank of #2 (Buy).

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

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