Here are the Drivers of Ciena Corporation’s (CIEN) Surge in Q3

CIEN +0.79%

Scout Investments, Inc., an affiliate of Carillon Tower Advisers, recently released its third-quarter 2025 investor letter for “Carillon Scout Mid Cap Fund”. A copy of the letter can be downloaded here. The Russell Midcap Index posted positive returns in the quarter, fueled by strong corporate earnings, the continued momentum in artificial intelligence (AI) infrastructure, and the anticipation of the U.S. Federal Reserve’s (Fed) interest rates. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Carillon Scout Mid Cap Fund highlighted stocks such as Ciena Corporation (NYSE: CIEN). Ciena Corporation (NYSE:CIEN) is a network technology company that offers hardware, software, and services for various network operators. The one-month return of Ciena Corporation (NYSE:CIEN) was 3.42%, and its shares gained 176.83% of their value over the last 52 weeks. On December 02, 2025, Ciena Corporation (NYSE:CIEN) stock closed at $202.50 per share, with a market capitalization of $28.627 billion.

Carillon Scout Mid Cap Fund stated the following regarding Ciena Corporation (NYSE:CIEN) in its third quarter 2025 investor letter:

"Ciena Corporation (NYSE:CIEN) designs and manufactures advanced optical and packet-optical networking hardware, including transport systems and pluggable transceivers. The stock’s outperformance during the quarter was driven primarily by the strength in cloud providers’ demand as Ciena’s high-speed optical networking solutions are critical components of their high-performance computing capacity buildouts. Hyperscalers led the trend while emerging customer groups such as smaller AI-focused cloud data center operators grew rap idly. In addition, recovery in telecommunications network investment continues and is expected to extend into next year."

Ciena Corporation (NYSE:CIEN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 70 hedge fund portfolios held Ciena Corporation (NYSE:CIEN) at the end of the third quarter, which was 57 in the previous quarter. Ciena Corporation (NYSE:CIEN) reported revenue of $1.22 billion in the third quarter of 2025, exceeding the upper range of guidance, which represents an 8% sequential increase and nearly a 30% year-over-year growth. While we acknowledge the potential of Ciena Corporation (NYSE:CIEN) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Ciena Corporation (NYSE:CIEN) and shared Madison Small Cap Fund's views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.