By Nate Wolf
Remember Ciena's incredible run-up just before the dot-com bubble? A look at the optical-networking company's stock chart might bring back a feeling of nostalgia.
After decades of stagnant returns, Ciena shares have morphed from a cautionary tale into one of Wall Street's hottest stocks. The stock has soared nearly 450% over the past 12 months. It's all on the back of the artificial-intelligence boom that has boosted demand for networking technology within and between data centers
On Monday, shares were 5.3% higher at $355.09, putting the stock on pace for its highest close since June 12, 2001, according to Dow Jones Market Data.
Things didn't end well for investors back then. After hitting an all-time closing high of $1,046.50 in late 2000, the stock tumbled, trading under $100 apiece -- and occasionally under $10 apiece -- from 2002 until 2025.
You likely already know the story: Investors who had piled into speculative tech stocks, betting on the transformative power of the internet, abandoned them when it became clear the profits wouldn't match the hype. Ciena had rapidly grown its fiber-optic cable business to keep up with demand. A slim profit in fiscal 2000 turned into deep annual losses for much of the next decade once that demand ran dry.
Now, investors are betting the AI boom will be different than the fiber boom. For Ciena, at least, they have some decent arguments. On its quarterly earnings call this month, the company acknowledged that its supply still lags well behind demand.
Not to mention, the hyperscalers behind much of the U.S. data-center buildout are highly profitable and flush with cash. They are much older, more established businesses than many of the big spenders at the turn of the century.
Ciena stock trades at a premium relative to peers, analysts at BofA Securities noted recently. But its valuation is nowhere near where it was 25 years ago. The stock today trades at 7.6 times projected sales over the next 12 months, compared to a multiple as high as 36 times in late 2000.
Of the 21 analysts polled by FactSet, 14 have a Buy or equivalent rating on Ciena stock, and just 1 firm rates it a Sell.
The bullish analysts may be wrong, and the wave of demand for networking solutions may dissipate. But it is tough to envision the kind of dramatic collapse Ciena experienced a generation ago.
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 16, 2026 13:17 ET (17:17 GMT)
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