This Glorious Artificial Intelligence (AI) Stock Has Crushed Nvidia and Broadcom With 147% Returns in 2025. It Can Jump by 111% in 2026

It anticipates a 30% year-over-year increase in revenue at the midpoint to $1.39 billion. Ciena management remarked on the latest earnings conference call that it is now experiencing stronger demand for its networking products from Meta Platforms, which is going to contribute toward the bigger jump in its top line.

Meta is going to deploy Ciena’s solutions in “multiple new data centers.” Ciena management also added that it is “engaged in advanced technical discussions with additional hyperscalers” to supply its data communications products in their data centers. So there is a possibility of Ciena’s revenue growing at a faster pace than the 24% increase that it is currently expecting for fiscal 2026 to $5.9 billion.

The company’s top line jumped by 19% last year, and the guidance for the first quarter suggests that it could easily overhaul its full-year forecast. Importantly, Ciena can sustain the acceleration in its growth in the long run as well. That’s because AI data centers reportedly require five times more optical connections as compared to traditional data centers.

The size of the AI data center market is poised to grow at an annual rate of 27% through 2032. This explains why analysts have become more bullish about Ciena’s prospects.

CIEN Revenue Estimates for Current Fiscal Year data by YCharts.

They are forecasting its top-line growth to filter down to the bottom line as well, and expect the company to witness stronger earnings growth thanks to a potential improvement in its margin profile.

CIEN EPS Estimates for Current Fiscal Year data by YCharts. EPS = earnings per share.

The strong growth in the company’s top and bottom lines could send the stock soaring in 2026 and beyond. In fact, it wouldn’t be surprising to see it outperforming both Nvidia and Broadcom in the new year as well.

We have already seen that Ciena’s fiscal first-quarter revenue is on track to increase by 30% from the year-ago period. Though the company’s fiscal 2026 revenue growth guidance of 24% is lower than what it expects to achieve in the current quarter, there is a chance that it could exceed expectations for the full year.

Ciena received $7.8 billion worth of orders in the previous fiscal year, which exceeded its annual revenue of $4.8 billion by a big margin. It ended fiscal 2025 with a revenue backlog of $5 billion, pointing out that this figure “supports a large share of our fiscal 2026 revenue expectations.” Ciena’s impressive backlog and its negotiations with other hyperscalers suggest that the company is on track to exceed the $5.9 billion revenue estimate for fiscal 2026.

Assuming it can consistently maintain a 30% growth rate throughout the year, its top line could hit $6.25 billion (based on the fiscal 2025 revenue of $4.8 billion). Ciena is currently trading at just 6.4 times sales, which is significantly lower than the two other AI stocks discussed in this article.

CIEN PS Ratio data by YCharts. PS = price-to-sales.

The U.S. technology sector trades at an average price-to-sales ratio of 8.7. If the market rewards Ciena with a premium valuation owing to its accelerating growth, and it trades at even 10 times sales after a year, its market cap could jump to $62.5 billion (based on the $6.25 billion revenue it could generate this year). That will be more than double its current market value, suggesting that it can deliver stronger gains than Broadcom and Nvidia in the coming year, as per their 12-month median price targets.

So, investors can consider buying Ciena stock hand over fist going into 2026, as it could sustain its red-hot rally in the new year.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

This Glorious Artificial Intelligence (AI) Stock Has Crushed Nvidia and Broadcom With 147% Returns in 2025. It Can Jump by 111% in 2026 was originally published by The Motley Fool