Lumen and Ciena achieve 1.2 terabit wavelength in network trial

DENVER - Lumen Technologies (NYSE: LUMN) and Ciena (NYSE: CIEN), a $9.35 billion market cap networking technology company with annual revenue of $4.05 billion, have successfully completed a network trial, transmitting a 1.2 terabit per second wavelength over a distance of more than 1,800 miles. According to InvestingPro data, Ciena maintains a healthy gross profit margin of 42.58% and strong liquidity with a current ratio of 3.65. This marks the longest non-regenerated signal at this speed, leveraging Lumen’s Ultra-Low-Loss (ULL) fiber network and Ciena’s WaveLogic 6 Extreme technology.

The trial, conducted from Denver to Dallas, utilized Ciena’s Waveserver platform equipped with the latest 800G interfaces and running over a 6500 photonic line system. This achievement is significant for hyperscalers and enterprises that require high bandwidth and cost-efficiency for artificial intelligence (AI) and next-generation applications.

Dave Ward, Lumen’s chief technology and product officer, highlighted the importance of the trial, stating that it enables digital transformation by providing the necessary infrastructure for the growth of AI and cloud workloads. This development aligns with analysts’ positive outlook for Ciena, with InvestingPro reporting that six analysts have recently revised their earnings estimates upward for the upcoming period. Lumen’s network, already offering 400G connectivity, offers a path to scale to 1.2 terabits to support AI and cloud applications.

The trial also demonstrated the compatibility and performance of the Juniper PTX10002-36QDD Packet Transport Router with Ciena’s technology, establishing Ethernet and IP services with minimal latency and no packet loss.

The significance of this development is underscored by the increasing demand for ultra-high-speed, low-latency connectivity for AI workloads, cloud applications, and real-time analytics. Microsoft, as a major user of such services, expressed that the trial represents a forward-thinking approach to meeting the growing demands for efficient data movement.

Ciena’s WL6e technology, featuring state-of-the-art 3nm silicon, is capable of carrying up to 1.6 terabits per second per wavelength, positioning the company as a leader in high-speed optical innovation. Brodie Gage, Ciena’s senior vice president, emphasized the importance of continuous investment in network technology to meet today’s bandwidth demands and prepare for future needs.

Lumen’s network, which already spans over 78,000 route miles, continues to expand with investments in next-generation fiber to enhance its ULL fiber network, the largest in North America.

This trial represents a step forward in network performance, offering faster connections and the flexibility to handle data-intensive applications across various industries, including AI, hyperscale cloud, financial trading, cybersecurity, and media streaming. While Ciena’s stock is currently trading above its InvestingPro Fair Value, investors can access detailed analysis, including 12 additional ProTips and comprehensive financial metrics, through the Pro Research Report available on the platform.

The information for this article is based on a press release statement from Lumen Technologies.

In other recent news, CIENA has reported a strong first-quarter performance with revenue reaching $1.07 billion, surpassing both UBS’s and consensus estimates. The company’s earnings per share also exceeded expectations at $0.64, well above the anticipated $0.44. Despite this positive performance, UBS has lowered its price target for CIENA from $85 to $73, maintaining a Neutral rating due to non-recurring items affecting gross margins. Stifel, however, has maintained a Buy rating with a $95 price target, highlighting CIENA’s strong order momentum from cloud service providers. Northland has upgraded CIENA’s stock to Outperform, citing a 14% year-over-year increase in Service Provider revenues and setting a new price target of $75. Needham has adjusted its price target from $95 to $90, still endorsing a Buy rating, noting CIENA’s robust activity in the North American and Service Provider segments. Meanwhile, Morgan Stanley has reduced its price target to $76 from $80, maintaining an Equalweight rating and expressing caution due to potential gross margin fluctuations and tariff uncertainties. These developments reflect a mix of optimism and caution among analysts regarding CIENA’s future performance.

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