Investing.com -- Ciena Corporation shares are trading around 1.1% higher on Thursday after Bank of America raised its price target on the stock to $550 from $355, reiterating a Buy rating on the optical networking specialist.

The bank sees the company at the center of a structural boom in AI-driven infrastructure spending.

Analyst Tal Liani describes Ciena as sitting at "the heart of an optical super-cycle that is expected to continue well into 2027," driven by surging bandwidth demands across both AI and non-AI data centers.

The bank sees "no signs of slowdown in the demand environment," pointing to a $2 billion backlog increase last quarter to $7 billion in total, alongside hyperscaler capital expenditure forecast to grow 65% year-on-year in 2026, following a record 70% expansion in 2025.

BofA has lifted its revenue growth estimates for Ciena to 28.5%, 21%, and 20% over the next three years, up from prior projections of 27.9%, 18%, and 16.5%, respectively.

The raised price target is now based on a 62x CY27 price-to-earnings multiple, reflecting what the bank calls Ciena's "strong position for scale-across interconnect networks" and longer-term optical deployment opportunities.

Within AI networking, BofA ranks Ciena among "the more attractive growth prospects," forecasting its share of 800G ZR pluggables will rise from roughly 30% in 2025 to at least 50% in 2026, even as that market grows tenfold.

The stock has already surged almost 100% year-to-date, though BofA notes it is currently trading on growth momentum rather than a traditional profit multiple.

Overall, the bank sees a “significant cloud growth opportunity ahead” for the company.