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Will Ciena's New 1.6 Tb/s Coherent Pluggable Solution Drive Top Line?

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Ciena Corporation (CIEN - Free Report) is advancing technology with the launch of a 1.6 terabits-per-second (Tb/s) Coherent-Lite pluggable, designed to assist cloud and data center providers in managing anticipated increases in traffic from cloud services, machine learning and artificial intelligence (AI). The WaveLogic 6 Nano (WL6n) 1.6 Tb/s prototype will be featured at Ciena's booth (A14) during ECOC 2024.

Ciena enhances its offerings for high-performance data center fabrics and campus applications with the introduction of the WaveLogic 6 Nano as both 1.6 Tb/s and 800G coherent pluggable solutions. Powered by a 3nm coherent application-specific integrated circuit (ASIC), the WL6n enables the 1.6 Tb/s Coherent-Lite option to utilize dual 800G data paths on a single Digital Signal Processor chip. This Coherent-Lite design optimizes power and latency, making it ideal for shorter-range data center needs.

Ciena highlighted that its 1.6 Tb/s coherent pluggable solution, driven by cutting-edge 3nm CMOS technology, introduces unprecedented scale and flexibility in data center design. The company plans to release the WL6n Coherent ASIC for electro-optic integration by the end of the year.

Ciena’s WaveLogic 6 Technology Gaining Traction

Ciena’s performance is driven by strengthening demand for bandwidth owing to rapid cloud adoption and the proliferation of AI technology use cases. As the industry's first 1.6 Tb/s coherent optic solution, its WaveLogic 6 Extreme introduces cutting-edge capabilities for optical transport.


In August 2024, Ciena and Arelion achieved a milestone with the world’s first 1.6 Tb/s wavelength data transmission in a live network field trial. Utilizing Ciena’s advanced WaveLogic 6 Extreme (WL6e), this achievement took place over Arelion’s 470km route connecting its Ashburn, VA (Equinix) and Telxius’ Virginia Beach cable landing station.

In January 2024, Ciena's WaveLogic 6 Extreme (WL6e) was employed by Southern Cross, an independent capacity provider in Australasia, to improve its SX NEXT expansion from Sydney to Los Angeles. This technology facilitated 800 Gb/s wavelengths across a 12,500 km network, delivering reliable, energy-efficient, high-bandwidth connections for services, including the recently launched 400GbE offerings.

WaveLogic 6 Extreme is picking up pace, and the company expects to witness top-line growth in the fiscal fourth quarter on increased adoption. So far, it has secured orders from 23 customers for WaveLogic 6 Extreme. This enhancement of WL6e technology is further expected to generate incremental revenues for CIEN in the near future, likely propelling the stock upward.

 

CIEN’s Zacks Rank & Stock Price Performance

CIEN currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 30.9% in the past year compared with the sub-industry's growth of 30.4%.

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Stocks to Consider

Some better-ranked stocks from the broader technology space are Seagate Technology Holdings plc (STX - Free Report) , ANSYS, Inc. (ANSS - Free Report) and American Software, Inc. .  STX presently sports a Zacks Rank #1 (Strong Buy), whereas ANSS & AMSWA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Seagate Technology delivered an earnings surprise of 80.9%, on average, in three of the trailing four quarters. In the last reported quarter, STX pulled off an earnings surprise of 40%. The Zacks Consensus Estimate for STX has increased 18% to $7.41 in the past 60 days.

ANSYS delivered an earnings surprise of 4.8%, on average, in three of the trailing four quarters. In the last reported quarter, ANSS pulled off an earnings surprise of 28.9%. It has a long-term earnings growth expectation of 6.4%.

American Software delivered an earnings surprise of 84.5%, on average, in the trailing four quarters. In the last reported quarter, AMSWA pulled off an earnings surprise of 71.4%. The Zacks Consensus Estimate for AMSWA has increased 8.6% to 38 cents in the past 60 days.


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