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Should VIAV Be in Your Portfolio After a 196.4% Gain in a Year?
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Key Takeaways
VIAV shares surged 196.4% in a year as AI data-center demand and profitability improved.
Fiscal 2026 revenue rose 40% to $1.52B, while non-GAAP EPS jumped 112.8% to $1.
Spirent assets, aerospace demand and Vertex 6.0 broaden VIAV's testing reach into 6G and Wi-Fi.
Shares of Viavi Solutions Inc. (VIAV - Free Report) have surged 196.4% over the past year compared with the industry’s growth of 142.1%. It has outperformed peers like Corning Incorporated (GLW - Free Report) and Ooma, Inc. (OOMA - Free Report) . While Corning has gained 95.2%, OOMA jumped 77.4% during this period.
The uptrend reflects investors’ growing optimism surrounding its exposure to artificial intelligence (AI) data centers, improving profitability and expanding testing capabilities. After such a strong rally, investors may wonder whether the stock still has enough fundamental strength to warrant a place in their portfolios.
One-Year VIAV Share Price Performance
Image Source: Zacks Investment Research
AI Data Center Momentum Fuels Growth
VIAVI is increasingly benefiting from the rapid expansion of AI and hyperscale data-center infrastructure. Demand for high-speed optical, Ethernet and network-testing solutions has strengthened as cloud operators, semiconductor companies and networking vendors invest in increasingly complex AI infrastructure.
The data-center ecosystem now accounts for roughly half of Network and Service Enablement (NSE) revenues. In the fiscal fourth quarter, NSE revenues jumped 69.2% year over year to $353.9 million, aided by robust demand for lab, production and field-testing products, aerospace and defense solutions and contributions from the acquired Spirent businesses.
The Spirent assets have strengthened VIAVI’s position in high-speed Ethernet testing, network security and channel emulation. The broader portfolio should create cross-selling opportunities while helping the company address growing testing requirements associated with AI clusters and next-generation networks.
Improving Profitability, Upbeat Outlook Lend Support
VIAVI exited fiscal 2026 on a strong note. Revenues increased 40% year over year to $1.52 billion, while non-GAAP earnings surged 112.8% to $1 per share. Non-GAAP operating margin expanded 630 basis points to 20.6%, highlighting solid operating leverage.
Management expects the momentum to continue. For the first quarter of fiscal 2027, VIAVI projects revenues between $450 million and $460 million and non-GAAP earnings of 40-42 cents per share. Both estimates imply sequential improvement from the June quarter.
Healthy aerospace and defense demand, particularly for positioning, navigation and timing solutions, provides another growth avenue and helps reduce VIAVI’s historical dependence on telecom carrier spending.
6G and Wireless Portfolio Expansion
Viavi is broadening its wireless testing opportunity with Vertex 6.0, an advanced channel emulator designed for 6G and Wi-Fi 7/8 testing. The platform supports up to 400 MHz instantaneous bandwidth and carrier frequencies up to 23.6 GHz, while extending coverage to cellular, Wi-Fi, military and aerospace applications. Viavi is also participating in the SHIELD-6G project, using its TeraVM AI RAN Scenario Generator to develop digital twins for AI-driven security testing. These developments expand VIAV’s wireless portfolio following the Spirent acquisition and create additional exposure to 6G, Wi-Fi, AI-RAN and specialized RF testing as these technologies develop.
Estimate Trend
Earnings estimates for VIAV for fiscal 2027 have moved up 32.8% to $1.62 over the past 60 days. Such positive estimate revisions indicate growing confidence in VIAV’s earnings potential.
Image Source: Zacks Investment Research
End Note
VIAVI’s 196.4% rally has been supported by a healthy improvement in its fundamentals rather than momentum alone. Robust AI data-center demand, Spirent-related opportunities, aerospace and defense strength and expanding margins provide a solid foundation for further growth.
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Should VIAV Be in Your Portfolio After a 196.4% Gain in a Year?
Key Takeaways
Shares of Viavi Solutions Inc. (VIAV - Free Report) have surged 196.4% over the past year compared with the industry’s growth of 142.1%. It has outperformed peers like Corning Incorporated (GLW - Free Report) and Ooma, Inc. (OOMA - Free Report) . While Corning has gained 95.2%, OOMA jumped 77.4% during this period.
The uptrend reflects investors’ growing optimism surrounding its exposure to artificial intelligence (AI) data centers, improving profitability and expanding testing capabilities. After such a strong rally, investors may wonder whether the stock still has enough fundamental strength to warrant a place in their portfolios.
One-Year VIAV Share Price Performance
Image Source: Zacks Investment Research
AI Data Center Momentum Fuels Growth
VIAVI is increasingly benefiting from the rapid expansion of AI and hyperscale data-center infrastructure. Demand for high-speed optical, Ethernet and network-testing solutions has strengthened as cloud operators, semiconductor companies and networking vendors invest in increasingly complex AI infrastructure.
The data-center ecosystem now accounts for roughly half of Network and Service Enablement (NSE) revenues. In the fiscal fourth quarter, NSE revenues jumped 69.2% year over year to $353.9 million, aided by robust demand for lab, production and field-testing products, aerospace and defense solutions and contributions from the acquired Spirent businesses.
The Spirent assets have strengthened VIAVI’s position in high-speed Ethernet testing, network security and channel emulation. The broader portfolio should create cross-selling opportunities while helping the company address growing testing requirements associated with AI clusters and next-generation networks.
Improving Profitability, Upbeat Outlook Lend Support
VIAVI exited fiscal 2026 on a strong note. Revenues increased 40% year over year to $1.52 billion, while non-GAAP earnings surged 112.8% to $1 per share. Non-GAAP operating margin expanded 630 basis points to 20.6%, highlighting solid operating leverage.
Management expects the momentum to continue. For the first quarter of fiscal 2027, VIAVI projects revenues between $450 million and $460 million and non-GAAP earnings of 40-42 cents per share. Both estimates imply sequential improvement from the June quarter.
Healthy aerospace and defense demand, particularly for positioning, navigation and timing solutions, provides another growth avenue and helps reduce VIAVI’s historical dependence on telecom carrier spending.
6G and Wireless Portfolio Expansion
Viavi is broadening its wireless testing opportunity with Vertex 6.0, an advanced channel emulator designed for 6G and Wi-Fi 7/8 testing. The platform supports up to 400 MHz instantaneous bandwidth and carrier frequencies up to 23.6 GHz, while extending coverage to cellular, Wi-Fi, military and aerospace applications. Viavi is also participating in the SHIELD-6G project, using its TeraVM AI RAN Scenario Generator to develop digital twins for AI-driven security testing. These developments expand VIAV’s wireless portfolio following the Spirent acquisition and create additional exposure to 6G, Wi-Fi, AI-RAN and specialized RF testing as these technologies develop.
Estimate Trend
Earnings estimates for VIAV for fiscal 2027 have moved up 32.8% to $1.62 over the past 60 days. Such positive estimate revisions indicate growing confidence in VIAV’s earnings potential.
Image Source: Zacks Investment Research
End Note
VIAVI’s 196.4% rally has been supported by a healthy improvement in its fundamentals rather than momentum alone. Robust AI data-center demand, Spirent-related opportunities, aerospace and defense strength and expanding margins provide a solid foundation for further growth.
Hence, this seems to be a good time for new investors to bet on the stock. VIAV sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.