Ciena Corporation ((CIEN Quick QuoteCIEN - Free Report) ) recently inked a definitive agreement to acquire Nubis Communications, a privately held company based in New Providence, NJ. Valued at $270 million in an all-cash transaction, the acquisition strengthens Ciena’s ability to address the growing need for scalable, low-latency interconnect technologies that power AI workloads.

This acquisition not only adds Nubis' advanced optical and electrical interconnect technologies to Ciena’s rich portfolio but also deepens its suite of engineering expertise with more than 50 talented specialists.

Nubis Brings Two Key Innovations to CIEN’s Portfolio

Nubis’ compact, high-density optical modules use light instead of traditional electrical signals to enable ultra-fast data transfer. Delivering up to 6.4 Tb/s of full-duplex bandwidth, they are designed for low latency and energy-efficient performance, ideal for scaling AI systems. When combined with Ciena’s high-speed SerDes, Nubis’ optical engines unlock advanced CPO solutions to address the increasing need for high-performance connectivity within and between racks.

Nubis’ advanced analog electronics improve copper connectivity by supporting 200 Gb/s per lane over distances up to 4 meters, offering lower power and latency compared to traditional copper or DSP-based methods, and enabling more AI accelerators to be interconnected without the limitations of existing technologies. ACC solutions complement Ciena’s optical offerings, creating a diverse portfolio of interconnect technologies that can meet the varied requirements of different customers.

By integrating Nubis’ optical and copper interconnect technologies, Ciena can offer a full stack of high-speed interconnects, spanning optical, electrical and hybrid solutions. Moreover, owning these key technologies allows Ciena to reduce development costs, accelerate innovation and expand into new use cases, while improving long-term profitability.

The deal, expected to close in fourth-quarter fiscal 2025, subject to customary purchase price adjustments for cash, debt and net working capital at closing, is poised to expand the company’s high-speed connectivity portfolio while accelerating its path into the surging data center ecosystem. Ciena will also implement employee retention arrangements to secure Nubis’ talent. Boards of directors of both companies and Nubis’ shareholders have already approved the deal.

CIEN Gains From Rising Bandwidth & Cloud Demand

Ciena is seeing stronger market momentum, fueled by rising AI-driven traffic and increased customer spending. Cloud and service providers are investing in networks to support this growth, creating long-term opportunities for its Systems, Interconnects and Coherent Routing businesses. The company is prioritizing R&D in optical and interconnect solutions while reducing focus on residential broadband. Navigator Network Control Suite orders rose more than 30% in early fiscal 2025, and Blue Planet continues to drive provider digital transformation. With this momentum, Ciena projects around 17% revenue growth for fiscal 2026, achieving the high end of its three-year CAGR target ahead of schedule.

The company expects its total addressable market to reach $13 billion by 2028 at a CAGR of 26%. Its interconnects portfolio is growing and offers a big opportunity for pluggables and component technologies. Also, a major hyperscaler placed its first large 400ZR+ order, positioning Ciena as its lead supplier. This supports expectations of at least doubling Interconnect revenues in fiscal 2025, with potential for further growth in fiscal 2026.

Nonetheless, Ciena has shifted R&D focus to Coherent Optical, Interconnects, Routing and DCOM, ending 25G PON development. This will result in a roughly $90 million noncash charge, excluded from GAAP earnings.

CIEN’s Zacks Rank & Stock Price Performance

Ciena currently sports a Zacks Rank #1 (Strong Buy). Shares of the company have risen 130.1% in the past year compared with the Zacks Communication-Components industry's growth of 80.5%.

Image Source: Zacks Investment Research

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