Networking and Telecom Equipment: Resilient Optical Networking Growth; Increasing POs for Cisco and Ciena

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Networking and Telecom Equipment: Resilient Optical Networking Growth; Increasing POs for Cisco and Ciena

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Networking and Telecom Equipment

Resilient Optical Networking Growth;

Increasing POs for Cisco and Ciena

Price Objective Change

Raise Cisco PO to $135; Ciena to $660 26 May 2026

Cisco’s recent f3Q26 results and commentary around continued strong demand for Equity

Acacia, keep us positive on the underlying demand environment for Optical Networking. Global

Cisco disclosed over $1bn in Acacia orders for 3Q, with AI-related optics growing nearly Telecom Equipment

4x to about $950mn, and additional growth stemming from hyperscale demand for non- Tal Liani

AI optics. As we look toward the migration of 400G to 800G pluggables, we believe Research Analyst

Cisco and Ciena are both well-positioned to remain share leaders within the fast- BofAS+1 646 855 5107

growing optical cycle. We revise our estimates for both companies to reflect the strong tal.liani@bofa.com

optical participation in AI-related infrastructure buildout, which prompts us to raise our Tomer Zilberman

Research Analyst

Cisco PO from $114 to $135 (now based on 29x 2027E EV/FCF from 25x prior) and raise BofAS

Ciena PO from $550 to $660 (now based on 69x CY27E P/E from 62x prior). Reiterate +1 646 855 3203

tomer.zilberman@bofa.com

Buy on both Cisco and Ciena.

Kevin Niederpruem

BofASOptical networks migrating from 400G to 800G in 2026 +1 646 855-1540

Cisco and Ciena specialize in high-end modulation for optical systems, dubbed Coherent kevin.niederpruem@bofa.com

optical. 400G ZR Coherent pluggables dominated Hyperscale deployments though 2025, Eden Vacnich

and we expect scale-across use cases to shift customer preference from 400G into Research Analyst BofAS