Fiber optic cables use a series of small, flexible fibers of glass or plastic to transmit light signals over long distances, allowing for extremely fast data transmission.
And with expansion on the horizon, investors are looking for ways in.
So, what are the best fiber optic stocks to buy now? I have personally tracked all the stocks which are mentioned below for more than 6 months to study their business plans, earnings report and more.
In short, this list is quite extensive in terms of research and quality. Let’s take a look.
Best Fiber Optic Stocks of 2023
Cisco Systems (NASDAQ: CSCO)
Since its inception, Cisco Systems has remained a leader in the computer networking industry, shaping the future of the internet and communication at large.
The company has held impressive financial results, generating revenue far beyond expert estimates.
In 2021, it announced its acquisition of Acacia communications, a company involved in producing transceivers and high-speed optical interconnect technologies.
Experts noted that this acquisition strengthens Cisco’s fiber optic tech portfolio.
More recently, CISCO reported its Q2 earnings, which ended on January 28, 2023.
Despite economic downturns, the company’s revenue amounted to $13.6 billion. This performance surpassed revenue estimations by $190 million.
Its fiscal first quarter, which ended in October 2022, also generated an impressive figure of $13.63 billion. This exceeded analysts’ estimates by $343.74 million.
A substantial degree of the company’s growth has resulted from its acquisitions.
However, the sale of software products, particularly subscription-based services is also expected to aid revenue growth further.
Over the next 12 months, analysts expect CSCO stocks to witness a substantial increase.
Several factors are expected to shape this performance, including its attractive valuations and robust profitability.
With its attractive dividend yields and strong free cash flows, CSCO could be an ideal investment for long-term investors.
Ciena Corp (NASDAQ: CIEN)
A leader in fiber optics, Cien stock appears to be a promising portfolio addition in 2023.
Through its software, optical networking equipment, and services, the company is expected to tackle macroeconomic uncertainties.
With rising interest rates and inflation, Ciena Corporation maintains a solid rank, robust estimates, and a strong business model.
Recently, it has witnessed continuous expansion in its customer base thanks to its collaborations and acquisitions.
Towards the end of 2021, the company announced its collaboration with Samsung Electronics.
The effect of this development was the introduction of 5G network solutions to the market that are open and adaptive.
Aside from its 5G growth drivers, Ciena also provides data center products to industry giants- Amazon and Facebook, who are expected to launch more data centers in coming years.
In its most recent quarter, Ciena amassed revenue of $971 million, exceeding analyst projections.
As of February this year, the company ranked at the 85th percentile of companies within its sector. It earned this with a $7.1 billion market capitalization.
With its increased ability to support clients and consequent growth in investments, the future appears promising for the company.
Broadcom, Inc. (NASDAQ: AVGO)
Headquartered in San Jose, California, Broadcom is a manufacturer and technology leader that offers a broad array of fiber optic solutions.
The company’s Optical System Division enables single and multimode fiber interconnects with a wide variety of integrated products.
It does this through its comprehensive suite of high-speed fiber optic solutions.
In 2022, Broadcom announced its decision to partner with Tencent Holdings Ltd.
This development is expected to spur the adoption of efficient and high-capacity CPO network switches for cloud infrastructure.
Over the past 12 months, the company’s stocks have increased by 3.8%, outperforming many of its industry peers.
One of the reasons investment in the company’s stocks appears promising is its earnings per share (EPS) growth. Over the last three years, it has earned a yearly 58% growth.
EPS growth may indicate the attainment of an inflection point. It is also usually expected to signify similar trend projections in share price.
In its fiscal 2022, Broadcom’s revenue rose by 21%, a remarkable increase from its fiscal 2021 growth of 15%.
Broadcom’s impressive performance is linked to its cheap stocks and high dividends. The company also continues to diversify and expand.
AVGO has a market capitalization of $251.0 billion, and its current trailing 12-month revenue sits at $33.2 billion.
In its next earnings release, set for March 2, 2023, Broadcom is expected to report an EPS of $10.16.
The company also expects its first quarter of the fiscal year to experience a 15 % rise in revenue.
ADVA Optical Networking SE (NASDAQ: ADVOF)
ADVA optical networking specializes in manufacturing telecommunication equipment, including optical and ethernet-based networking solutions.
For its 2022 fiscal year, ADVA optical networking announced its first quarter experienced remarkable revenue gain.
This was attributed to its technologically driven improvements that have facilitated increased customer demand.
The company recently developed an Advanced Link Monitoring (ALM) system that provides real-time, in-service fiber monitoring.
This system works for a wide range of applications in both fixed and mobile access.
Its 2022 fiscal year witnessed an 18% growth in revenue despite material shortages, inflation, and supply issues globally.
ADVA optical networking has an annual revenue generation of $674.13 billion and a $1.16 billion market capitalization.
At the beginning of 2023, the company’s stock trading was at $23.49.
ADV’s stock subsequently increased by 2.0% to trade at $23.95.
The company currently has a share price of $23.07, and it is currently trading within the 50% to 60% percentile range.
According to forecasts, ADVA can be a profitable investment option if you seek stocks with excellent long-term returns.
Lumentum Holdings (NASDAQ: LITE)
Formed in 2015, Lumentum Holdings caters to various end-market applications providing optical and photonic products.
In the past seven years, it has experienced tremendous growth to sit among the world’s top fiber stocks.
Lumentum Holdings caters to end-market applications such as telecom, datacom, and commercial lasers, providing optical and photonic solutions.
As of 2021, the stock traded at about 16 times the earnings per share estimated by analysts. And in its fiscal first quarter that ended in September, its net income soared by over $47 million.
In the last ten months, the company witnessed a share price increase of over 10%
The company, earlier in the year, announced its 2023 fiscal second quarter results.
It earned a solid financial and operational performance, with a net revenue of $506.0 million.
Its non-GAAP net income was $104.1 million, while its first quarter was $119.2 million or $1.69 per diluted share.
The future outlook for Lumentum appears optimistic, as in the following years, its earnings are expected to double.
For the first fiscal third quarter of 2023, Lumentum expects a net revenue within the range of $430 million to $460 million.
For its Non-GAAP earnings, it projects an operating margin of 17% to 19%.
Clearfield (NASDAQ: CLFD)
Clearfield, headquartered in Minneapolis, US, manufactures and designs fiber optics for communication networks.
The company had a market capitalization of $939.5 million as of February 17 this year.
The company’s fiber optic cable management solutions are where its strength lies.
And recently, its services are generating high demand, especially in the community broadband area.
This puts the company at a competitive advantage over industry players.
Its fiscal report for the year’s first quarter revealed a 68% growth in revenue year-over-year. Net sales, therefore, grew from $51 million to $86 million.
The company also witnessed a 53% growth in organic sales, triggered by increased demand for its products and offers.
Regarding historical stock score levels, CFLD trades in the 30% to 40% percentile range.
In August 2022, Clearfield closed its acquisition of Nestor Cables, a Finnish manufacturer of fiber optic cable solutions manufacturer.
With the company now operating as its subsidiary, Clearfield expects this major development to contribute to its financial earnings for 2023.
CommScope (NASDAQ: COMM)
Based in North Carolina, CommScope Holding Company specializes in designing and manufacturing optical components and other infrastructure solutions for communication networks.
The company is recognized for its great network response time and efficient supply chain due to its elite team of cable operators and engineers.
This, according to analysts, will play a significant role in drawing partnerships in the telecommunications business as the industry moves to 5G.
The company is primarily devoted to supporting the convergence of wireline and wireless network, which would play a crucial role in the success of 5G.
In the first quarter of 2021, CommScope reported impressive results, exceeding expert estimates.
Experts highlight that the need for fiber optics network infrastructure has grown following the culture of remote working that has recently become the norm.
Remote working has boosted demand for reliable internet connection and high network capacity from individuals and businesses.
With mobile network densification and the expansion of optical fiber networks, the company expects to maintain its growth momentum.
In its upcoming earning report, it is expected that if the numbers perform above expectations, its stock could increase.
Are Fiber Optic Stocks a Good Investment?
It’s not farfetched to call fiber optic stocks a good investment; they are a crucial component of the growing demand for data and internet services.
The global fiber optics market is set to rapidly expand in the coming years and is expected to grow by roughly 40% over the next four years.
Fiber optic technology can send and receive data faster than traditional copper wires, ultimately granting businesses, homes, and even governments access to higher bandwidths and blazing-fast internet.
Fiber optic companies allow investors to benefit from the industry’s growth as more people and organizations seek to utilize fiber optic technology.
FAQs
Who Is The Largest Producer Of Fiber Optic Cables?
Corning is currently the leading producer of fiber optic cables across the world.
What Company Owns The Most Optical Fibers?
AT&T currently owns the most fiber broadband coverage in the United States due to its expansive fiber optic network.
Who Is The Father Of The Fiber Optic Cable?
Charles Kuen Kao is regarded as the father of fiber optic cable due to his discovery of a particular type of glass currently serving as the fulcrum of global communications networks.
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