Ciena CEO Says AI Boom Differs From Telecom Bust

what happened

Gary Smith, who has led Ciena since May 2001, tells The Wall Street Journal that he is wary of comparing the current AI boom with the telecom crash of the early 2000s. He recalls a glut of unused fiber, collapsing prices and a market value of the company that fell more than 90% during the bust. In his view, the AI cycle will unfold in successive waves, from linking data centers to inference, AI agents and physical AI, rather than following the familiar boom-and-bust pattern.

Citi's Heath Terry, as cited by the WSJ, estimates that about 94% of fiber laid during the telecom boom was dark. Smith argues that today's customers are generally sounder, including highly profitable cloud computing giants. Ciena expects a 30% compound annual growth rate for fiscal 2026 through 2029 and an order backlog of about $10 billion by the end of fiscal 2026.

why it matters

The view of a executive who lived through the telecom crash shapes the debate over how long the AI spending cycle can last. While investors weigh the risk of overinvestment, such comments support interest in optical networking suppliers.

market impact

Ciena and optical suppliers: expectations of long AI network demand support the sector

tags

instruments