Ciena, the optical networking equipment maker, will rejoin the S&P 500 on February 4, 2026, replacing HR software company Dayforce after Thoma Bravo's $12.3 billion acquisition. It's a notable return: Ciena joined the index in 2001 during the dot-com boom, got removed in 2009 when Visa took its spot, and spent 17 years rebuilding.
The catalyst is AI infrastructure. Hyperscalers need high-speed optical networks to connect data centers running generative AI workloads, and Ciena sells the coherent optics and routing gear that makes it work. The company projects $5.7-6.1 billion in fiscal 2026 revenue, 24% growth at the midpoint, which would be the fastest pace since 2011.
The numbers back the momentum. Fiscal Q4 2025 delivered $1.35 billion in revenue and $665 million in free cash flow. Ciena authorized $330 million in share buybacks under a $1 billion program. The stock hit its highest point since 2001 on Tuesday, up 42% over the past year.
What's changed strategically: In late 2025, Ciena scaled back residential broadband to focus on AI networking and acquired Nubis Communications for interconnect technology. Nearly 18% of fiscal 2025 revenue came from a single unnamed cloud provider. AT&T accounts for another 11%.
CEO Gary Smith told analysts in December that AI infrastructure is "a major contributor to our 2026 expected growth rate." CFO Marc Graff noted supply constraints on optical components, similar to the memory shortages affecting AI chip makers, but said the company secured supply from key vendors.
The S&P inclusion matters beyond the prestige. Index funds must buy Ciena shares to match the benchmark, creating automatic demand. AppLovin, Datadog, DoorDash, and Robinhood all joined the S&P 500 in 2025 with similar stock bumps.
The question for enterprise tech leaders: How sustainable is this growth if hyperscaler AI spending slows? Ciena's revenue projections assume continued infrastructure buildout through 2028, but the company's heavy reliance on a single cloud customer and modest current earnings relative to revenue suggest execution risk remains. We'll see.