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Don't Overlook These 2 AI-Driven Tech Stocks After Earnings: CIEN, NTAP
While mega-cap AI stocks tend to grab most of the attention, investors shouldn't overlook Ciena (CIEN - Free Report) ) and NetApp (NTAP - Free Report) ) following impressive earnings reports this week.
Operating in different corners of the technology infrastructure market, Ciena's high-speed optical networking equipment and NetApp's intelligent data-storage platforms are increasingly benefiting from the massive infrastructure requirements surrounding AI and cloud computing.
Even better, both companies crushed quarterly earnings expectations and raised their outlooks, while currently sporting a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Ciena's AI-Fueled Networking Demand Accelerates
Ciena delivered a blockbuster report for its fiscal third quarter, with a quarterly peak in adjusted earnings at $2.11 per share, soaring 215% from $0.67 a year ago and topping the Zacks EPS Consensus of $1.74 by more than 21%.
Quarterly revenue surged 37% to a record $1.67 billion and topped estimates of $1.64 billion.
More importantly, the optical networking specialist is seeing enormous demand as cloud providers upgrade the high-speed networks needed to connect AI data centers.
Revenue from cloud providers jumped 82% year over year, while sales of Ciena's Reconfigurable Line System (RLS) and Waveserver platforms climbed more than 55% and pluggable products more than doubled.
Management subsequently raised its fiscal 2026 revenue guidance to approximately $6.42 billion, representing around 35% growth at the midpoint, and expects at least 30% revenue growth in FY27. Ciena also expects its backlog to exceed $10 billion by fiscal year-end, highlighting the depth of demand.
Interestingly, CIEN shares still fell over 10% following the report as investors focused on component-supply constraints and near-term margin expectations. However, with demand currently exceeding Ciena's ability to secure components, the sell-off may overshadow an increasingly powerful long-term growth story and end up being a buy-the-dip opportunity.
Image Source: Zacks Investment Research
NetApp Also Delivers Record Results & Raises Guidance
NetApp was equally impressive, posting record results for its fiscal first quarter with Q1 revenue of $2.02 billion, up 30% YoY and comfortably beating estimates of $1.84 billion by nearly 10%.
Meanwhile, Q1 adjusted EPS surged 66% to a quarterly peak of $2.58, crushing expectations of $2.13 by 21%.
Growth was broad-based, with Hybrid Cloud revenue rising 30% to $1.82 billion and Public Cloud sales increasing 28% to $206 million. Particularly encouraging was record all-flash array revenue of $1.31 billion, up nearly 47%, as customers increasingly deploy NetApp's high-performance storage systems for GPU-intensive AI workloads.
NetApp also landed roughly 350 AI and data-lake modernization deals during the quarter, showing that enterprise AI projects are increasingly moving from experimentation toward production workloads.
Reflecting this momentum, management significantly raised its current fiscal 2027 revenue guidance to $7.98-$8.23 billion, with adjusted EPS now expected at $9.73-$10.03.
The $8.1 billion sales midpoint implies roughly 17% annual growth and is $650 million above NetApp's previous outlook, while the $9.88 EPS midpoint represents approximately 22% growth from FY26 and is nearly 12% above its prior guidance midpoint of $8.85.
Image Source: Zacks Investment Research
Bottom Line
Ciena and NetApp offer investors two different ways to capitalize on the AI infrastructure boom. Ciena is benefiting from surging demand for the optical networking equipment needed to connect increasingly powerful data centers, while NetApp is supplying the storage and data infrastructure required to operate AI workloads.
Most importantly, their growth outlooks strengthened considerably after earnings. With CIEN and NTAP both currently sporting a Zacks Rank #2 (Buy), these two tech stocks shouldn't be overlooked as earnings estimates are likely to keep moving higher following their impressive quarterly performances.
View the Zacks #1 Rank List
Image: Bigstock
Don't Overlook These 2 AI-Driven Tech Stocks After Earnings: CIEN, NTAP
While mega-cap AI stocks tend to grab most of the attention, investors shouldn't overlook Ciena (CIEN - Free Report) ) and NetApp (NTAP - Free Report) ) following impressive earnings reports this week.
Operating in different corners of the technology infrastructure market, Ciena's high-speed optical networking equipment and NetApp's intelligent data-storage platforms are increasingly benefiting from the massive infrastructure requirements surrounding AI and cloud computing.
Even better, both companies crushed quarterly earnings expectations and raised their outlooks, while currently sporting a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Ciena's AI-Fueled Networking Demand Accelerates
Ciena delivered a blockbuster report for its fiscal third quarter, with a quarterly peak in adjusted earnings at $2.11 per share, soaring 215% from $0.67 a year ago and topping the Zacks EPS Consensus of $1.74 by more than 21%.
Quarterly revenue surged 37% to a record $1.67 billion and topped estimates of $1.64 billion.
More importantly, the optical networking specialist is seeing enormous demand as cloud providers upgrade the high-speed networks needed to connect AI data centers.
Revenue from cloud providers jumped 82% year over year, while sales of Ciena's Reconfigurable Line System (RLS) and Waveserver platforms climbed more than 55% and pluggable products more than doubled.
Management subsequently raised its fiscal 2026 revenue guidance to approximately $6.42 billion, representing around 35% growth at the midpoint, and expects at least 30% revenue growth in FY27. Ciena also expects its backlog to exceed $10 billion by fiscal year-end, highlighting the depth of demand.
Interestingly, CIEN shares still fell over 10% following the report as investors focused on component-supply constraints and near-term margin expectations. However, with demand currently exceeding Ciena's ability to secure components, the sell-off may overshadow an increasingly powerful long-term growth story and end up being a buy-the-dip opportunity.
Image Source: Zacks Investment Research
NetApp Also Delivers Record Results & Raises Guidance
NetApp was equally impressive, posting record results for its fiscal first quarter with Q1 revenue of $2.02 billion, up 30% YoY and comfortably beating estimates of $1.84 billion by nearly 10%.
Meanwhile, Q1 adjusted EPS surged 66% to a quarterly peak of $2.58, crushing expectations of $2.13 by 21%.
Growth was broad-based, with Hybrid Cloud revenue rising 30% to $1.82 billion and Public Cloud sales increasing 28% to $206 million. Particularly encouraging was record all-flash array revenue of $1.31 billion, up nearly 47%, as customers increasingly deploy NetApp's high-performance storage systems for GPU-intensive AI workloads.
NetApp also landed roughly 350 AI and data-lake modernization deals during the quarter, showing that enterprise AI projects are increasingly moving from experimentation toward production workloads.
Reflecting this momentum, management significantly raised its current fiscal 2027 revenue guidance to $7.98-$8.23 billion, with adjusted EPS now expected at $9.73-$10.03.
The $8.1 billion sales midpoint implies roughly 17% annual growth and is $650 million above NetApp's previous outlook, while the $9.88 EPS midpoint represents approximately 22% growth from FY26 and is nearly 12% above its prior guidance midpoint of $8.85.
Image Source: Zacks Investment Research
Bottom Line
Ciena and NetApp offer investors two different ways to capitalize on the AI infrastructure boom. Ciena is benefiting from surging demand for the optical networking equipment needed to connect increasingly powerful data centers, while NetApp is supplying the storage and data infrastructure required to operate AI workloads.
Most importantly, their growth outlooks strengthened considerably after earnings. With CIEN and NTAP both currently sporting a Zacks Rank #2 (Buy), these two tech stocks shouldn't be overlooked as earnings estimates are likely to keep moving higher following their impressive quarterly performances.