Bull of the Day: Ciena Corp. (CIEN)

December 18, 2025 — 06:00 am EST Written by Bryan Hayes for Zacks-> Ciena Corporation, a Zacks Rank #1 (Strong Buy), has seen its shares surge this year as the company benefits from an accelerating transformation driven by artificial intelligence and explosive demand for networking solutions. Ciena is a global technology provider of hardware, software, and related services for network operators.The stock has broken out to a multi-decade high in 2025 on increasing volume. Shares continue to display relative strength as buying pressure accumulates in this market leader.Ciena is part of the Zacks Communications - Components industry group, which currently ranks in the top 13% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has throughout the year:Image Source: Zacks Investment ResearchTake note of the favorable characteristics for this group below. Stocks in this industry are relatively undervalued based on traditional valuation metrics. They are also projected to experience above-average earnings growth, which signifies a powerful combination that should lead to higher prices in the future.Image Source: Zacks Investment ResearchHistorical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.In a year where artificial intelligence has reshaped the technology landscape, few companies have captured the momentum quite like Ciena. The networking specialist, a standout in the Zacks Communications - Components industry, has witnessed its shares surge more than 140% year-to-date, significantly outperforming both the broader market and its peers.The catalyst for the bullish move? Explosive demand for high-speed optical networking solutions driven by AI infrastructure buildouts and cloud expansion. The company's innovations in coherent optics and photonic solutions position it at the heart of the multi-year AI networking cycle, where hyperscalers and service providers invest heavily to support data-intensive applications.Its optical systems, software, and services power data transmission for telecom providers, cloud companies, and governments, with a primary focus on developing adaptive, AI-ready networks for massive bandwidth demands. Ciena specializes in high-speed connectivity, optical transport, routing, switching, and network automation, helping its clients manage data for 5G, broadband, and data centers.What stands out is Ciena's consistent ability to deliver positive earnings surprises. Over the last twelve quarters, Ciena has missed the EPS mark just twice. The company delivered a trailing four-quarter average surprise of over 22%, reflecting strong execution in converting AI-driven demand into results. This track record aligns perfectly with the power of the Zacks Rank system, which prioritizes stocks showing upward earnings revisions.Ciena's transformation has been remarkable. The company reported fiscal fourth-quarter results just last week that exceeded expectations, with adjusted EPS of $0.91 beating the Zacks Consensus Estimate by 18%. Revenue of $1.35 billion topped forecasts by nearly 5% while growing 20% from the year-ago period. Management highlighted record orders, a $5 billion backlog, and market share gains in optical networking, particularly among cloud providers now representing a larger mix of sales.The Maryland-based company has been the beneficiary of improving earnings estimate revisions as of late. Looking into the current quarter, analysts have raised their fiscal Q1 2026 EPS estimates by 39.47% in the past 60 days.

The Zacks Consensus Estimate now stands at $1.06 per share, reflecting better than 65% growth relative to the same period in the prior year. Revenues in the current quarter are projected to climb nearly 30% to $1.39 billion.Image Source: Zacks Investment ResearchCIEN shares have advanced nearly 300% off the April bottom. Only stocks that are in extremely powerful uptrends are able to make this type of price move and widely outperform the market. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.Image Source: StockChartsNotice how shares remain above upward-sloping 50-day (blue line) and 200-day (red line) moving averages. A short-term pullback presents a unique buying opportunity. With both strong fundamentals and technicals, Ciena stock is poised to continue its outperformance.Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Ciena has recently witnessed positive revisions. As long as this trend remains intact (and CIEN continues to deliver earnings beats), the stock will likely continue its bullish run through the remainder of this year and beyond.Currently, Ciena CIEN carries a Zacks Rank #1 (Strong Buy), driven by favorable estimate momentum heading into fiscal 2026. Analysts project robust growth, with guidance implying mid-20% revenue expansion and continued margin improvement from scale and mix benefits.Solid institutional buying should continue to provide a tailwind for the stock price.

The Zacks Communications - Components industry itself ranks in the top tier, benefiting from structural tailwinds like fiber densification and data center interconnects. Ciena's leadership here, combined with its earnings beat streak and positive revisions, makes it a compelling choice for investors seeking exposure to AI's ongoing infrastructure boom.As someone who has followed networking stocks through multiple cycles, it's encouraging to see Ciena not just riding the wave but helping build the foundation for tomorrow's connected world. With a solid backlog providing visibility into 2026 and beyond, this remains a name worth considering for growth-oriented portfolios. Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational. From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. 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 reportCiena Corporation (CIEN) : Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchThe views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.This data feed is not available at this time.