Strong results at
( JDSUD) and
( AVNX) sparked a furious Friday rally among the optical-parts makers.
Solid fiscal first-quarter numbers, including a
swing to an adjusted profit by JDSU and
raised sales guidance by Avanex on Thursday help propel 15% gains in the two stocks Friday.
Other players, including fiber-optic component maker
( BKHM) and optical-systems manufacturer
, also basked in the resurgent glory. Bookham shares rose 8%, and Finisar was up 4% in midmorning trading.
Optical networking has long been a hotly speculative corner of the tech market. Investors often seize on the slightest favorable presumption -- and, conversely, bolt on the tiniest sign of weakness. After a brief run-up earlier this year, JDSU had fallen to a 52-week low in recent days as pessimists outnumbered optimists.
But a sunny outlook and raised gross margin guidance has helped JDSU fans and optical-sector bulls find a new reason to believe.
"Demand for optical systems remains strong if not overwhelmingly so with carriers continuing to build-out networks, especially in the metro, to support triple play services," JPMorgan analysts Ehud Gelblum wrote in a research note. Gelblum, who has neutral rating on JDSU, points out that demand seems resilient "despite some slowing due to carrier consolidation."
JDSU soared $2.11 to $16.39, and Avanex rose 23 cents to $1.75.