TLDR
- Ciena stock is up ~1.1% Thursday after Bank of America raised its price target to $550 from $355, keeping a Buy rating
- BofA describes Ciena as sitting at “the heart of an optical super-cycle” expected to continue well into 2027
- Ciena’s backlog grew $2 billion last quarter to $7 billion total; hyperscaler capex forecast to grow 65% YoY in 2026
- BofA now expects revenue growth of 28.5%, 21%, and 20% over the next three years
- JPMorgan also raised its price target to $550 from $380, maintaining an Overweight rating as part of a Q1 hardware preview
Bank of America raised its price target on Ciena (CIEN) to $550 from $355 on Thursday, reiterating a Buy rating on the optical networking company. The stock was trading around 1.1% higher on the news.
Analyst Tal Liani described Ciena as sitting at “the heart of an optical super-cycle” that is expected to run well into 2027. The driver is surging bandwidth demand across both AI and non-AI data centers.
BofA said it sees “no signs of slowdown in the demand environment.” The bank pointed to a $2 billion backlog increase last quarter, bringing Ciena’s total backlog to $7 billion.
Hyperscaler capital expenditure is forecast to grow 65% year-on-year in 2026, following a record 70% expansion in 2025. That kind of spending creates a strong backdrop for optical networking suppliers like Ciena.
BofA lifted its revenue growth estimates for Ciena to 28.5%, 21%, and 20% over the next three fiscal years. Those figures are up from prior projections of 27.9%, 18%, and 16.5% respectively.
Price Target Based on 62x Earnings Multiple
The new $550 price target is based on a 62x CY27 price-to-earnings multiple. BofA says this reflects Ciena’s “strong position for scale-across interconnect networks” and longer-term optical deployment opportunities.
The stock has already surged nearly 100% year-to-date. BofA noted that Ciena is currently trading on growth momentum rather than a traditional profit multiple.
Within AI networking, BofA ranks Ciena among “the more attractive growth prospects.” The bank forecasts Ciena’s share of 800G ZR pluggables will rise from roughly 30% in 2025 to at least 50% in 2026.
That market itself is expected to grow tenfold over the same period. Capturing a larger slice of a fast-growing pie is a key part of the bull case here.
JPMorgan Also Moves to $550
JPMorgan independently raised its price target on Ciena to $550 from $380 on Thursday, also keeping an Overweight rating on the stock.
Analyst Samik Chatterjee made the move as part of a broader Q1 preview of the hardware and networking group.
JPMorgan expects AI infrastructure investment across servers, switches, copper interconnects, and optical to drive upside for AI-levered suppliers in Q1.
The firm also downgraded four names in the group and opened “positive catalyst watches” on CDW and Seagate as part of the same review.
Both BofA and JPMorgan landing on the same $550 target gives the price level a certain weight. Ciena was trading around 1.1% higher as of Thursday morning.
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