The AI-driven expansion in optical networking infrastructure is creating strong growth opportunities for Ciena Corporation (CIEN Quick QuoteCIEN - Free Report) and Coherent Corp. (COHR Quick QuoteCOHR - Free Report) . Both companies are benefiting from rising bandwidth demand, hyperscale AI deployments and the growing need for high-speed interconnect solutions across data centers and telecom networks. However, their strategies differ. Ciena is leveraging its leadership in WAN connectivity, scale-across networking and pluggable optics, while Coherent is focusing on photonic technologies, transceivers, co-packaged optics and optical circuit switching solutions.

Ciena appears to have stronger positioning in carrier-grade optical networking and hyperscaler connectivity, supported by rising backlog, growing market share and broad demand across service providers and cloud customers. Meanwhile, Coherent is aggressively expanding manufacturing capacity and gaining momentum in AI data center optics, particularly through 800G, 1.6T and CPO opportunities.

Let’s analyze their fundamentals, growth opportunities, market challenges and valuation to assess which one presents a stronger investment opportunity.

The Case for CIEN

Ciena is benefiting from sustained innovation and product development that align with evolving optical networking requirements in AI-driven environments. The company’s advanced portfolio, which includes next-generation optical engines, pluggable optics and data center management platforms, is well-positioned to address increasing demand for higher bandwidth, improved power efficiency and high-performance connectivity across modern networks.

In March 2026, Ciena introduced a new suite of innovations aimed at supporting the evolving connectivity needs of AI infrastructure. These offerings included advancements in hyper-rail photonics, next-generation coherent optics and AI-driven network automation solutions designed to help hyperscalers, cloud providers and telecom operators build scalable optical networks capable of supporting rapidly growing AI workloads. On its latest earnings call, management highlighted the launch of the Vesta 200 6.4T optical engine and continued progress with its Nitro Linear Redriver technology, further strengthening Ciena’s presence inside and around the data center.

The company is also gaining from strong customer adoption of its optical networking solutions across high-growth data traffic markets. In March 2026, the Ciena WaveLogic 6 Extreme (WL6e) coherent optical solution was implemented by Vodafone Idea Limited to modernize its transport network infrastructure. Deployment is intended to address the sharp increase in data traffic across India, fueled by expanding cloud adoption, AI workloads and enterprise digital transformation. Management also noted during the latest earnings call that orders in India increased 40% year over year, driven by robust managed optical fiber network (MOFN) demand, highlighting the country’s growing requirement for large-scale optical connectivity infrastructure.

Ciena is benefiting from exceptionally strong and durable demand, supported by record order activity and long-term customer planning. For the first quarter of fiscal 2026, Ciena reported record revenue of $1.43 billion, reflecting 33% year-over-year growth, while backlog increased by approximately $2 billion to nearly $7 billion. Management noted that demand continues to exceed supply, with most new orders now expected to be fulfilled in fiscal 2027, providing strong visibility into future growth. Expanding AI data center deployments and rising investments from hyperscalers are driving strong demand for high-speed optical interconnect solutions, while Ciena continues to gain market share through its technology leadership and deep customer relationships.

Additionally, Ciena is benefiting from structural demand growth in its core WAN business, driven by continued cloud adoption and the increasing requirement to connect geographically distributed data centers. Service providers are accelerating investments in optical transport infrastructure and autonomous networking technologies to support surging AI-driven traffic and improve operational efficiency. At the same time, hyperscalers are increasing spending across scale-up, scale-out and scale-across AI architectures, creating additional opportunities for Ciena’s optical networking portfolio.

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For fiscal 2026, the company expects revenue in the range of $5.9 billion to $6.3 billion. For the second quarter of fiscal 2026, management expects revenue of approximately $1.5 billion, plus or minus $50 million.

However, Ciena faces increasing capital expenditure requirements as it expands capacity to support strong AI-led demand. Management indicated that fiscal 2026 capital expenditure is running nearly two to three times above the average level of the previous 12 quarters, creating the risk that investments may move ahead of near-term revenue realization. A substantial portion of the backlog is also scheduled for fulfillment in fiscal 2027, which could pressure short-term returns if customer deployment timelines shift. In addition, ongoing supply-chain constraints, component shortages and intense competition across optical networking and AI infrastructure markets remain key concerns for the company.

The Case for COHR

Coherent is benefiting from exceptionally strong AI-driven demand across its Datacenter & Communications segment, which accounted for 75% of total company revenue in the third quarter of fiscal 2026. Revenue in this segment increased more than 40% year over year, driven by accelerating adoption of transceivers, optical networking systems and AI connectivity solutions. The company also reported another step-function increase in bookings, pushing backlog to record levels with orders extending into 2028 and long-term agreements reaching the end of the decade.

Another major positive for Coherent is its rapid expansion in 800G and 1.6T transceivers, which are becoming critical for AI data center scaling. Management expects 1.6T transceiver deployments to ramp rapidly through the rest of the year and into next year as more customers adopt higher-speed networking architectures. The company also expects strong growth from optical circuit switches (OCS), where it recently increased its estimated market opportunity to more than $4 billion due to rising demand across AI networking applications.

Coherent is making significant progress in co-packaged optics (CPO), which management sees as a transformational long-term growth opportunity worth more than $15 billion. The company announced a partnership with NVIDIA that includes a $2 billion equity investment and a multiyear supply agreement extending through the end of the decade. Coherent expects initial scale-out CPO revenue to begin ramping in the second half of the calendar year, while scale-up deployments are expected to accelerate in 2027.

Despite these growth drivers, Coherent continues to face supply constraints tied to indium phosphide production, which management described as an industry-wide bottleneck. Although the company is aggressively expanding capacity and expects to double output earlier than planned, these supply limitations could temporarily restrict revenue growth if demand continues outpacing production capabilities.

Another challenge is that Coherent’s industrial business remains relatively soft compared with its fast-growing AI networking operations. Revenue in the industrial segment declined sequentially and year over year due to weakness across parts of the broader industrial market. While management sees signs of recovery and expects improving semiconductor equipment demand, industrial operations are still not contributing meaningfully to current growth.

CIEN Shares vs. COHR

Over the past six months, CIEN shares have surged 191.4% while Coherent stock has jumped 145.1%.

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Valuation for CIEN & COHR

In terms of Price/Book, CIEN shares are trading at 29.56X, higher than COHR’s 6.43X.

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How Do Zacks Estimates Compare for CIEN & COHR?

Analysts have marginally revised their earnings estimates upward for CIEN’s bottom line for the current year.

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For COHR, there have been upward revisions for the current year.

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CIEN or COHR: Which Stock to Bet on?

CIEN sports a Zacks Rank #1 (Strong Buy) at present, while COHR has a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank and valuation, CIEN seems to be a better pick at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.