In an interview with Light Reading, reporter Tereza Krásová interviewed the company’s Chief Strategy Officer David Rothenstein. Here are a few key takeaways:
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Backlog growth and component shortages: Ciena’s backlog is stretching toward $10 billion by the end of the year. The obstacle to growth is not market orders, but supply chain constraints such as specialized optical components (especially pump lasers), ceramic packaging, and memory chips. Supply chain constraints are expected to continue all the way into 2028, and supply is estimated to match demand only in the second half of that same year.
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Neoscalers as a new driver: In addition to hyperscalers, a new “neoscaler” group (e.g., Oracle, SpaceX, CoreWeave, Anthropic) is emerging in the market, whose own network infrastructure building is just in the early stages.
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Supply chain rebalancing: Ciena estimates that supply and demand will meet only in the second half of 2028, despite new supply agreements extending into 2029.
Discussing the disconnect between Ciena’s operational success and the falling share price, Rothenstein described the drop in valuation as “a pretty significant market overreaction” that is not limited to Ciena alone:
“I think the market ran up telecom quite significantly for about six months in the first half of the year to very aggressive valuations. I think it’s now overcorrecting in the other direction, and my hope is that, much like supply and demand, the market at some point will stabilize and normalize around this.”