Ciena Tumbles 10% as In-Line Guidance Overshadows Earnings Beat, Arista Edges Higher

Ciena's stock fell 10% after delivering a record quarter, but its guidance for the fourth quarter remained in line with expectations. Meanwhile, Arista Networks saw its stock rise 3% as AI networking continued to gain momentum. Cisco remained nearly flat, and IYW traded higher, indicating that Ciena's decline is a specific issue rather than a sector-wide problem.

Two customers accounted for 42% of Ciena's quarterly revenue, which highlights the company's reliance on a narrow customer base. Ciena's adjusted earnings per share were $2.11, beating analyst estimates of $1.72, while revenue grew 37% to $1.67 billion. The company also raised its full-year guidance to $6.42 billion, up 35% year-over-year.

Arista Networks reported a non-GAAP EPS of $1.02 on $3.04 billion in revenue, marking its first three-billion-dollar quarter. Management highlighted Ethernet-based AI networking as a durable opportunity, with a full-year revenue outlook of approximately $12.6 billion. Cisco reported $4 billion in AI infrastructure orders for Q4 FY2026 and forecasted fiscal 2027 AI infrastructure revenue of $7.5 billion, positioning the company as part of a networking supercycle.

Ciena's guidance reset is expected to be a key factor in its next inflection point, which will take place at the end of December. The broader market remains positive, with AI networking demand remaining intact, and Arista Networks and Cisco showing strong year-to-date gains.