• While Ciena expects a growing backlog and forecasts growth in its total addressable market, it continues to face supply constraints.
• For the second quarter, Ciena’s revenue came in at $1.57 billion, and adjusted earnings per share were $1.64, both ahead of estimates.
• For the full year, it now expects total revenue to be about $6.3 billion, give or take $100 million.

Shares of optical networking solutions provider Ciena Corp. (CIEN) nosedived on Thursday after the company flagged ongoing supply constraints amid soaring demand from hyperscaler customers, which overshadowed its beat-and-raise report for the second quarter.

At the time of writing, CIEN stock was down over 17%, and was among the top trending tickers on Stocktwits.

Supply Problems

The company, along with its peers, continues to face shortages of critical components amid robust demand from hyperscalers and artificial intelligence customers building out their data center infrastructure.

During an earnings call with analysts, Ciena executives said they expect to exit the year with an even higher backlog and that their total addressable market could reach up to $50 billion over the next three years. However, that positive commentary was tempered by the disclosure that it is also facing a supply crunch.

“Against this demand backdrop, which has been noted across the industry, we continue to see an imbalance of supply not keeping pace with demand,” Ciena CFO Marc Graff told analysts. “As we think about those things that are probably most constrained, we do have some constraints on modem, so typically, like CDMs. We are working with both our supply partners and customers to ensure we can serve our large and growing backlog.”

Q2 Results At A Glance

For the second quarter, Ciena reported a 40% surge in total revenue to $1.57 billion, ahead of the $1.50 billion estimate polled by Fiscal AI. It reported adjusted earnings per share (EPS) of $1.64, ahead of the $1.45 estimate.

For the full year, it now expects total revenue to be about $6.3 billion, give or take $100 million, revised from the $5.9 billion to $6.3 billion range previously guided, and ahead of the $6.18 billion estimate.

What Do Retail Traders Think About CIEN?

On Stocktwits, retail sentiment about CIEN remained in ‘extremely bullish’ territory amid ‘extremely high’ message volumes over the last 24 hours, with many users on the platform describing the pullback as a buying opportunity.

CIEN stock has more than doubled in value so far this year and has risen sixfold over the past 12 months, outperforming the S&P 500.

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