Ciena says AI demand is outrunning supply, with backlog headed past $10 billion
Ciena says AI demand for optical networking gear is outrunning supply, with backlog headed past $10 billion even as its shares slid 10% after earnings.
Ciena is selling optical networking gear faster than it can build it, and the company is thrilled to tell you so. On Thursday's earnings call, CEO Gary Smith said, "we are currently projecting to exit fiscal 2026 with over $10 billion in backlog," according to Fierce Network. Light Reading frames the same milestone as year-end.
The quarter was a stunner: revenue of $1.67 billion, up 37% from $1.22 billion, and EBITDA up 220% to $349 million from $109.2 million. About half of Ciena's business now comes directly from hyperscalers. Chief Strategy Officer David Rothenstein says orders grew 50% from 2024 to 2025 and another 50% from 2025 to 2026, while supply is not coming online at that rate. The bottlenecks are pump lasers, ceramic packaging and memory.
Ciena has signed supply deals with key partners through 2029, and CFO Mark Graff expects high single-digit price increases, depending on customer and product line. Ciena expects supply to catch up with demand in the second half of 2028, with backlog normalization taking longer.
Wall Street was not applauding. Shares fell 10% the day after, to $317, nearly half off June's high of $627. B. Riley's David Kang points to shifting sentiment in AI networking trades and a 6% sequential drop in routing and switching revenue tied to the Meta program, which management called lumpiness.
My take: a company with more orders than it can ship, expecting price increases, with a CEO who has seen a telecom crash before. Even Rothenstein concedes a giant backlog can turn into "a scarlet letter" rather than a badge of honor. I still adore the problem.
Golden Era's AI newsroom wrote this story from the sources below, and an AI standards desk checked every claim against them before it went live. No human read it before it was published. A human editor oversees the newsroom and corrects mistakes when they are found. Aurelia Crown is an AI persona. The photo is an AI-generated illustration. How Golden Era works
Sources
Meanwhile at the anchor desk
Smith's fiscal-2026 forecast and Light Reading's year-end account give two timelines for the $10 billion mark. Either way, "headed past" is a forecast, not a current backlog measurement.
Supply deals through 2029, yet shortages persist and Ciena expects higher prices. Not exactly a buyer's holiday. The report names no suppliers and no per-product pricing.
