For Immediate Release
Chicago, IL – July 15, 2026 – Today, Zacks Equity Research Corning Inc. GLW, Viavi Solutions Inc. VIAV and Ooma, Inc. OOMA
Industry: Communication Components
The Zacks Communication - Components industry is likely to benefit from healthy demand trends driven by the fast-track 5G deployment and the transition to cloud and fiber networks. However, volatility in prices due to elevated customer inventory levels, high capital expenditure for infrastructure upgrades, margin erosion, volatility in oil prices and geopolitical conflicts has dented the industry’s profitability.
Of the industry players, Corning Inc., Viavi Solutions Inc. and Ooma, Inc. are likely to gain in the long run as demand for scalable infrastructure for seamless connectivity rises with the widespread proliferation of IoT, accelerated 5G rollout and fiber densification.
Industry Description
The Zacks Communication - Components industry primarily comprises companies that provide diverse telecom products and services to develop scalable network architecture, demand-driven video solutions and broadband access equipment. These include various building blocks such as small cells, routers and antennas incorporated into equipment and facilities and subsequently utilized by service providers to build networks for end users.
Their product portfolio encompasses optical and copper connectivity products, hybrid fiber-coaxial equipment, edge routers, metro Wi-Fi, storage and distribution equipment for cable TV operators, modems, EMTAs (Embedded Multimedia Terminal Adapter), gateways, set-top boxes, analog and digital microphones, audio processors, glass substrates for LCD TVs and notebooks, and ceramic substrates for mobile and laboratory filtration products.
What's Shaping the Future of the Communication Components Industry?
Software-Driven Data-Centric Connectivity: The firms are likely to benefit from a software-driven, data-centric approach that helps customers build their cloud architecture and enhance the cloud experience. The industry participants are well-poised for growth in the data-driven cloud networking business with proactive platforms and predictive operations. Fiber networks are essential for the growing deployment of small cells that bring the network closer to the user and supplement macro networks to provide extensive coverage.
Telecom service providers are increasingly leaning toward fiber optic cable to meet the burgeoning demand for cloud-based business data and video streaming services by individuals. Moreover, the fiber-optic cable network is vital for backhaul and last-mile local loops, which are required by wireless service providers to deploy the 5G network.
Network Convergence: With operators moving toward converged or multi-use network structures, combining voice, video and data communications into a single network, the industry is increasingly developing solutions with steady R&D investments to support wireline and wireless network convergence. These investments are likely to help minimize service delivery costs to adequately support broadband competition and expand rural coverage and wireless densification. The industry players have enabled enterprises to rapidly scale communications functionalities to a vast range of applications and devices with easy-to-use software application programming interfaces. The firms support high user volumes without affecting deliverability and cost-effectively eliminate performance degradation.
Waning Profits: Although higher infrastructure investments will eventually help minimize service delivery costs to support broadband competition and wireless densification, short-term profitability has largely been compromised. High technological obsolescence of most products has escalated operating costs with steady investments in R&D. High customer inventory levels and a conservative approach toward placing orders for high-value items remain other headwinds. Moreover, high raw material prices due to the United States-Iran war, volatility in oil prices due to restrictions across the Strait of Hormuz and the consequent economic fallout have affected the operation schedule of various firms.
Solid Demand Trends: As both consumers and enterprises are using networks more extensively, there is tremendous demand for quality networking components. Additionally, data consumption patterns are changing, with a growing propensity to consume more 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 optical solutions is strong. The industry firms offer several products focused on the data center, with a typical portfolio comprising optical fiber, hardware, cables and connectors, enabling them to meet the evolving customer requirements and bridge the digital divide across the United States.
Zacks Industry Rank Indicates Bullish Prospects
The Zacks Communication - Components industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #31, which places it among the top 13% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates rosy prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Before we present a few communication component stocks that are well-positioned to outperform the market based on a strong earnings outlook, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Outperforms S&P 500, Sector
The Zacks Communication - Infrastructure industry has outperformed the S&P 500 composite and the broader Zacks Computer and Technology sector over the past year.
The industry has jumped a stellar 293.4% over this period compared with the S&P 500 and sector’s rise of 23.6% and 33.2%, respectively.
Industry's Current Valuation
On the basis of the trailing 12-month price-to-book (P/B), the industry is currently trading at 12.21 compared with the S&P 500’s 8.09X. It is also above the sector’s trailing 12-month P/B of 10.45X.
Over the past five years, the industry has traded as high as 15.4X, as low as 1.72X and at the median of 2.53X.
3 Communication Components Stocks to Buy
Corning: New York-based Corning produces advanced glass substrates that are used in various applications across multiple markets, such as display technologies, optical communications, environmental technologies, specialty materials and life sciences businesses. The stock has surged 248.6% over the past year. The Zacks Consensus Estimate for the current and next fiscal-year earnings has been revised 14.3% and 40.2% upward, respectively, over the past year. It has a long-term earnings growth expectation of 23.9% and delivered an earnings surprise of 2.4%, on average, in the trailing four quarters.
Corning continues to focus on developing state-of-the-art cover materials, which have been deployed on more than 8 billion devices. It 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. The rising adoption of innovative optical connectivity products for generative AI applications is expected to be a key growth driver for the company. Corning currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Viavi: Headquartered in Scottsdale, AZ, Viavi is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. It offers products with end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. It delivered an earnings surprise of 13%, on average, in the trailing four quarters. The Zacks Consensus Estimate for the current and next fiscal-year earnings has been revised 69.1% and 106.8% upward, respectively, over the past year.
The integration of Spirent’s high-speed Ethernet and network security testing assets continues to contribute to revenue growth and broadens Viavi’s addressable market across enterprise and data center applications. Investments in PCIe 7.0 analysis capabilities and the launch of the CyberFlood CF1000 platform expand Viavi’s ability to validate AI inference workloads, encrypted traffic and next-generation data center infrastructure. It strengthens exposure to long-term AI-related network testing demand and supports continued growth in lab, production and field-testing solutions. This Zacks Rank #2 company is up 300.4% in the past year.
Ooma: Headquartered in Sunnyvale, CA, Ooma offers cloud-based communications solutions, smart security and other connected services. Its smart software-as-a-service and unified-communications-as-a-service platforms serve as a hub for seamless communications and networking infrastructure applications. This Zacks Rank #2 firm delivered an earnings surprise of 14.2%, on average, in the trailing four quarters. The Zacks Consensus Estimate for the current and next fiscal-year earnings has been revised 40.2% and 17.2% upward, respectively, over the past year. It has a VGM Score of A. The stock was up 68.2% in the past year.
Ooma’s focus on small business customers with simple, easy-to-use interfaces that can be implemented quickly without IT support for an integrated business connectivity solution is likely to drive healthy growth momentum. Its low-cost fixed line that reportedly offers faster emergency access services is expected to gain traction, while increased penetration within enterprise markets with customized offerings is expected to bear fruit.
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