The artificial intelligence (AI) frenzy remains intact, although the rally suffered setbacks in the first quarter of 2026. The AI infrastructure space remains rock solid, supported by an extremely bullish demand scenario. Research firm McKinsey & Co. has estimated that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030.
Four major hyperscalers have decided to invest a massive $650 billion in 2026 as capital expenditure for AI-infrastructure development. This marks a significant 71.1% year-over-year increase in capital spending on the AI ecosystem.
Here, we recommend three AI infrastructure giants that have flourished in the past month with more than 30% returns. Their current favorable Zacks Rank indicate more price upside in the near term.
These are: Ciena Corp. CIEN, Corning Inc. GLW and Lumentum Holdings Inc. LITE. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks in the past month.
Image Source: Zacks Investment Research
Ciena Corp.
Zacks Rank #1 Ciena has been benefiting from accelerating AI-led demand from cloud and service provider customers. Powered by strong cloud and service provider momentum, CIEN has gained 2 points of optical market share year to date and expects further gains in 2026.
CIEN’s first-quarter fiscal 2026 reflected a 33% year-over-year top-line gain, 111% EPS growth and a record $7 million order backlog, driven by accelerating AI-led demand from cloud and service provider customers.
CIEN continues to capitalize on WAN connectivity needs across subsea, long-haul, metro networks and DCI. Better pricing, Hyper-Rail innovation and cost optimization are expected to boost gross margins, ahead. For fiscal 2026, adjusted gross margin is projected at 43.5-44.5%.
With the first half exceeding expectations and supply challenges being managed, CIEN now expects first- and second-half gross margins to be roughly similar. It is managing supply conditions effectively and expanding capacity, but demand is expected to exceed supply for the next several quarters. For the second quarter, CIEN expects revenues of $1.5 billion (+/-$50 million).
Ciena has an expected revenue and earnings growth rate of 27.1% and more than 100%, respectively, for the current year (ending October 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 13.4% in the last 30 days.
Corning Inc.
Zacks Rank #2 Corning continues to focus on developing state-of-the-art cover materials, which have been deployed on more than 8 billion devices. GLW offers several products focused on the data center, with a portfolio consisting of optical fiber, hardware, cables and connectors, enabling it to create optical solutions to meet evolving customer needs. This augurs well for its long-term growth.
The growing adoption of innovative optical connectivity products for generative AI applications is expected to be a key growth driver for GLW in the upcoming quarters. Since both consumers and enterprises are using networks more extensively and the data thus generated is increasingly being used to train AI models, there is tremendous demand for quality networking.
Additionally, data consumption patterns are changing, with a growing propensity to consume video content, creating the need for faster data transfer. Since optical networks are more efficient and most existing networks are copper-based, the demand for GLW’s optical solutions is particularly strong.
Corning has an expected revenue and earnings growth rate of 10.1% and 23%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1% in the last 30 days.
Lumentum Holdings Inc.
Zacks Rank #2 Lumentum Holdings designs and manufactures optical and photonic technologies for high-speed telecommunications, data centers, and advanced manufacturing. LITE provides components, such as transceivers and lasers for fiber-optic networks, supporting the rapid growth of AI, cloud computing, 5G connectivity, and beyond.
LITE’s fiscal second-quarter 2026 results mark a significant inflection point for the company, driven by strengthening demand for AI infrastructure connectivity solutions. LITE’s robust revenue growth reflects accelerating customer adoption of optical technologies that address bandwidth and power efficiency challenges in modern AI workloads.
LITE’s technology leadership in high-speed optical components has positioned it as an essential supplier to hyperscale customers deploying next-generation network architectures. Moreover, LITE has a strong collaboration with NVIDIA for developing NVDA’s silicon photonics ecosystem, especially for deploying the latter’s Spectrum-X Photonics networking switches.
Lumentum Holdings has an expected revenue and earnings growth rate of 77.3% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 1.1% over the last 60 days.
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Ciena Corporation (CIEN): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).