A new Ciena survey reveals that 90% of service providers expect high-capacity AI-driven network services to be a primary driver of revenue growth over the next three to five years.

The research, conducted by Censuswide among more than 1,200 telecom, wholesale, and regional service provider experts across 12 countries between July 13 and July 23, 2026, highlights a strong sense of urgency regarding infrastructure readiness. While 56% of respondents identify AI connectivity as their primary source of net-new revenue, 88% report a critical or high urgency for optical network upgrades to support premium enterprise AI service level agreements (SLAs).

Infrastructure Urgency vs. Revenue Opportunity

The data indicates a divergence between revenue optimism and infrastructure preparedness. Nearly half (48%) of respondents believe upgrades are critical, with 39% stating they are needed within the next 12-18 months. Only 11% believe routine upgrades will suffice. Advanced network automation, including agentic AI, is viewed as essential by 96% of respondents to capitalize on these opportunities.

Key Revenue Drivers

Service providers identified several specific areas where AI is reshaping revenue streams:

• Managed Optical Fiber Network (MOFN): 96% expect MOFN services to generate revenue from connecting distributed AI compute clusters within three years. 51% identify MOFN as their primary vehicle for delivering data center interconnect (DCI) services.
• AI Inference: 49% believe growth in AI inference data centers will create new revenue opportunities by increasing demand for DCI services.
• GPU-as-a-Service: 94% view strategic partnerships with cloud and neocloud providers as essential. Among those surveyed, 44% plan to adopt revenue-sharing models as their primary go-to-market strategy.
• Network Edge: 39% expect edge-hosted services, such as edge compute and localized AI inference, to drive more than 20% of enterprise revenue within three years. 88% expect it to drive at least 10%.
• Physical AI: 60% expect physical AI ecosystems, including industrial robotics, to account for more than 15% of total enterprise AI revenue within five years.
• Consumer AI: 95% believe immersive and AI-driven entertainment will contribute to new revenue streams in the next three years. 29% named AI wearables and personal devices as the leading consumer hardware category expected to drive premium service revenue.

Shifting Priorities: Reliability and Security

Beyond bandwidth, the survey highlights a shift toward reliability and security as monetization drivers. 35% of service providers identify network consistency, including guaranteed performance stability and low jitter, as the top opportunity for premium offerings. This reflects the critical nature of AI workloads to business processes.

Hyperscaler scale-across demand is also emerging as a substantial contributor to wholesale revenue growth, with 95% of respondents citing its importance. As power constraints limit single-campus data center expansion, distributed synchronous training requires ultra-high-speed connections reaching tens of petabits-per-second.

Security remains a top priority, with 51% of respondents stating they have launched or expect to launch commercial quantum-safe encryption services within 12 months. Another 48% are in early development stages. Advanced physical and cyber security capabilities were cited as the leading commercial driver of sovereign network infrastructure.

What the Numbers Show

The survey data reveals a clear dependency on partnership models for emerging AI services. While 94% of providers view partnerships with cloud and neocloud entities as essential for GPU-as-a-Service success, nearly half (44%) plan to rely specifically on revenue-sharing models. This suggests that service providers are positioning themselves as infrastructure enablers rather than sole asset owners in the high-capacity AI ecosystem.

Brodie Gage, Chief Product and Technology Officer at Ciena, stated that service providers are approaching AI with both optimism and urgency. He noted that success will depend on having the network foundation to support new performance demands.

Ciena Corporation (NYSE: CIEN) shares gained 13.94% to close at $441.54 on Wednesday, buoyed by positive momentum in the fiber optic connectivity sector. The move followed the release of fourth-quarter financial results from peer Lumentum Holdings Inc. (NASDAQ: LITE), which reported earnings and revenue that topped analyst expectations.

The broader market environment supported the rally, with the Nasdaq Composite rising 0.86% and the S&P 500 gaining 0.29%. The Technology sector led all groups with a 1.57% gain, reflecting renewed investor confidence in optical networking companies.

Lumentum Q4 Results

Lumentum reported fourth-quarter earnings of $3.23 per share, beating the consensus estimate of $2.97. Revenue for the quarter totaled $1.01 billion, surpassing the Street estimate of $987.89 million. This represents a significant year-over-year increase from $480.7 million in the prior-year period.

Lumentum also issued first-quarter guidance above Street estimates, further reinforcing the positive sentiment across the sector.

What the Numbers Show

Lumentum’s revenue more than doubled compared to the prior-year period, rising from $480.7 million to $1.01 billion. This substantial growth, combined with a clear beat on both top-line and bottom-line figures, suggests robust demand in the optical connectivity market, which is likely driving the sympathy rally for peers like Ciena.

Ciena Technical Levels

Ciena stock has risen 358.11% over the past 12 months. It is currently trading 22% above its 200-day simple moving average (SMA) of $360.70, indicating a constructive long-term trend. However, the stock remains 6.4% below its 100-day SMA of $470.28.

In the near term, shares are trading 12.9% above the 20-day SMA ($389.87) and approximately 1% above the 50-day SMA ($435.78). A cautionary note is that the 20-day SMA remains below the 50-day SMA, a bearish crossover that may act as resistance until the shorter average turns back up.

• Key Resistance: $485.50, near the 100-day SMA zone and a prior pivot region.
• Key Support: $424.50, aligning with the 50-day exponential moving average (EMA) area of $428.04.