Ciena, Astera Labs sit 48–70% off highs as demand climbs

Both companies sit in the plumbing of AI data centers: Ciena in optical networking and Astera Labs in chips that move data between AI processors. The selloff last week reflected fresh worries about AI spending, yet the reported results point the other way. Ciena's revenue rose 37% to $1.7 billion in the quarter ended Aug. 1, and it had $8.5 billion in orders waiting to be filled, a backlog management expects to top $10 billion by the end of its fiscal year.

Astera Labs, meanwhile, saw second-quarter revenue more than double to $392 million and guided third-quarter revenue to $540 million to $560 million, a sequential increase of about 40%. Management also says new products could eventually command several thousand dollars per processor, which would lift revenue per customer as more AI servers are installed.

Ciena's pitch rests on photonics, where it says it earned about 4.5 times as much revenue as its nearest competitor since 2022, with market share rising from 45% to 70%. The risk cited is a slowdown in AI spending, which would put the growth outlook at risk; Broadcom is named as competition for Astera. Both stocks trade at forward P/Es that the piece frames as reasonable or high but justified if the growth arrives.