{"id":112949,"date":"2026-03-06T09:46:16","date_gmt":"2026-03-06T14:46:16","guid":{"rendered":"https:\/\/www.businessupturn.com\/usa\/?p=112949"},"modified":"2026-03-06T09:46:16","modified_gmt":"2026-03-06T14:46:16","slug":"bank-of-america-upgrades-ciena-to-buy-as-data-center-boom-drives-optical-networking-demand","status":"publish","type":"post","link":"https:\/\/www.businessupturn.com\/usa\/bank-of-america-upgrades-ciena-to-buy-as-data-center-boom-drives-optical-networking-demand\/112949\/","title":{"rendered":"Bank of America upgrades Ciena to Buy as data center boom drives optical networking demand"},"content":{"rendered":"
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Bank of America has upgraded Ciena stock to Buy from Neutral. The firm also raised its price target to $355 from $260. Analysts believe strong investment in data centers will keep demand high for networking equipment.<\/p>\n

The upgrade comes after a fresh review of spending plans by major cloud companies. Bank of America now believes the networking sector has stronger growth potential than it previously expected.<\/p>\n

The firm said demand for high speed data connections is rising quickly. This trend could support the industry for several more years.<\/p>\n

Ciena to benefit from data center expansion<\/h2>\n

Bank of America believes the current demand cycle could turn into a long growth phase. Analysts described it as a possible super cycle that may last until 2027.<\/p>\n

Large cloud companies continue to invest heavily in new data centers. These facilities are needed to support artificial intelligence workloads and growing internet traffic.<\/p>\n

Many new data centers are also expected to be built between 2026 and 2028. As these facilities come online, they will require advanced networking systems.<\/p>\n

Ciena sells optical networking equipment used to connect data centers. This equipment helps move large amounts of data between servers and cloud infrastructure.<\/p>\n

Because of this role, the company is well positioned to benefit from the expansion in global data center capacity.<\/p>\n

Optical networking demand rising with AI growth<\/h2>\n

Another factor supporting demand is the rise of artificial intelligence. AI systems require huge amounts of data to move quickly between computing systems.<\/p>\n

This has increased the need for high speed optical connections. Ciena already has a strong position in this area.<\/p>\n

The company has a leading share in advanced optical modules such as 800G pluggables. It is also expanding its presence in 400G networking systems.<\/p>\n

Bank of America also highlighted growth opportunities in Ciena\u2019s line systems business. New technologies developed after its acquisition of Nubis Communications could also add to future revenue.<\/p>\n

Because of these trends, analysts now expect stronger growth from the company. Bank of America forecasts Ciena revenue could rise about 28% in fiscal 2026. A year ago the expected growth was only around 8%.<\/p>\n

The company\u2019s order backlog has also increased sharply. It recently grew by about $2 billion in a single quarter and reached around $7 billion. This backlog provides visibility for future sales.<\/p>\n

Ciena faces risks despite strong growth outlook<\/h2>\n

Even with the positive outlook, analysts say some risks remain. The optical networking market has always been cyclical.<\/p>\n

Sometimes customers place large orders early to build inventory. This can happen when supply shortages are expected.<\/p>\n

If those orders slow later, growth could also slow down. That could affect Ciena\u2019s valuation.<\/p>\n

Another concern is the supply of key components. Some laser parts used in optical networking equipment remain in tight supply. Higher component costs could reduce profit margins.<\/p>\n

Still, Bank of America believes the long term demand for networking infrastructure remains strong. As cloud companies continue building new data centers, firms like Ciena are expected to play a key role in connecting the digital world.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Bank of America has upgraded Ciena stock to Buy from Neutral. The firm also raised its price target to $355\u2026<\/p>\n","protected":false},"author":294,"featured_media":112950,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73],"tags":[15690,35660],"class_list":["post-112949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-us-markets","tag-bank-of-america","tag-ciena"],"reading_time":"3 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/112949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/users\/294"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/comments?post=112949"}],"version-history":[{"count":1,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/112949\/revisions"}],"predecessor-version":[{"id":112951,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/112949\/revisions\/112951"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media\/112950"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media?parent=112949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/categories?post=112949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/tags?post=112949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}