TD Cowen analyst Joshua Buchalter cut his Ciena price target to $575 from $675 while maintaining a buy rating. The stock fell 8.9 percent to $405.54 on Tuesday. Ciena reports fiscal third-quarter results on Sept. 3.
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Ciena falls 9% as TD Cowen cuts target by $100
Ciena shares fell 8.9 percent to $405.54 on Tuesday after TD Cowen analyst Joshua Buchalter cut his price target by $100 to $575.
Buchalter maintained his buy recommendation, saying Ciena is striking a balance between its long-term growth potential and the timing of that growth. The adjustment was part of a broader reassessment of semiconductor stocks, including fresh evaluations of Nvidia and Broadcom.
The analyst is generally bullish on the sector given current capital spending on compute and networking equipment. The stock's recent weakness creates a lower base for it to rise post-earnings, he said.
Ciena is scheduled to publish fiscal third-quarter results before market open on Thursday, Sept. 3. The stock has gained 90 percent year to date and 390 percent over the past year, with cloud providers now accounting for 46 percent of revenue, up 70 percent year over year.
The decline was part of a broader selloff in AI hardware stocks. The iShares Semiconductor ETF fell about 5.4 percent as investors rotated out of high-multiple growth names. The 30-year Treasury yield hit a 19-year high, compressing long-duration growth valuations. Sentiment also cooled after Anthropic disclosed a $65 billion annualized revenue run rate, below whisper numbers, and the Wall Street Journal flagged roughly $3 trillion of off-balance-sheet AI commitments across nine top tech companies. A soft reaction to Fabrinet's fiscal first-quarter 2027 guidance of $1.375 billion to $1.425 billion added to the pressure on optics and networking names.
Ciena trades at 143 times trailing earnings and 52 times forward earnings. The consensus price target stands at $560, with 13 buy or strong-buy ratings. The new $575 target from TD Cowen implies about 42 percent upside from Tuesday's close. The stock's 52-week range spans $84.41 to $637.51, with Tuesday's session range of $391.77 to $427.74.
The price target cut reflects growing caution about the timing of AI-driven growth for optical networking suppliers, even as long-term demand remains intact. Investors will watch Ciena's fiscal third-quarter results on Sept. 3 for updated guidance on cloud provider spending.
This article is for informational purposes only and does not constitute investment advice.
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