Bank of America upgraded Ciena to Buy from Neutral, citing sustained investment by cloud companies in data centers. The brokerage raised its price target to $355 from $260 after revising its outlook for spending by hyperscalers and cloud providers. Earlier caution on the networking sector now appears premature as data center construction plans show no signs of slowing.

Bank of America views the current demand cycle as a "super-cycle" that could extend into 2027, driven by rising bandwidth needs and new data center capacity planned for 2026-2028. This expansion includes both artificial intelligence and traditional infrastructure, creating demand for network interconnect and scale-across architectures. Ciena's optical networking equipment positions it to benefit from this buildout.

The company leads in high-speed optical modules like 800G pluggables and has a growing presence in 400G systems. Bank of America also highlighted growth potential from Ciena's line systems business and technologies from its Nubis Communications acquisition. Revenue growth expectations have jumped to 28% for fiscal 2026, up from roughly 8% a year earlier.