Partnership Expansion Might Change The Case For Investing In Viavi Solutions (VIAV)

• Calnex Solutions Plc recently announced an expansion of its partnership with Viavi Solutions, combining Calnex network emulation with Viavi ONE LabPro, TestCenter and CyberFlood tools to deliver end to end testing of real world traffic and network conditions across AI, data center, defense, Satcom and enterprise markets.
• Viavi Solutions also launched the compact CyberFlood CF50 platform for 100G application, security and AI inference testing, which concentrates more validation workloads into a single appliance and could influence test budgets, competitive positioning and how buyers evaluate Zero Trust and encrypted traffic performance.
• This article examines how Viavi Solutions' investment narrative intersects with the expanded Calnex partnership as one way to assess its AI focus.

Spot emerging AI testing plays around Viavi Solutions by screening for 92 AI infrastructure stocks that could benefit as encrypted traffic, Zero Trust architectures and data center upgrades reshape network validation.

Viavi Solutions Investment Narrative Recap

To own Viavi Solutions, you need to be comfortable with a story built around data center, fiber and high speed optical test demand offsetting choppy telecom and wireless spending. The near term hinge is whether robust data center orders and AI related validation needs translate into steadier use of its portfolio while the firm is still loss making today with US$1,518.3m of revenue and a net loss of US$30.4m.

The biggest short term swing factor is execution on integrating acquired Spirent assets and Inertial Labs while carrying a new US$600m term loan. The main risk is that ongoing weakness in wireless test, volatile service provider budgets and any supply chain shock in Asia slow the path to the earnings recovery analysts expect. The Calnex and CF50 updates support the AI test narrative but do not remove those pressures.

The CyberFlood CF50 launch looks most tightly linked to the current story. It brings 100G application, security and AI inference testing into a compact, lower power 1U system, which fits directly into Viavi Solutions positioning around encrypted traffic, Zero Trust architectures and more intensive AI workloads inside data centers and carrier networks.

For catalysts, the CF50 gives Viavi another way to participate as operators and hyperscalers validate 400G, 800G and eventually 1.6T infrastructure and more AI heavy traffic patterns. The key operational questions are adoption and pull through. How often CF50 wins sit alongside broader Viavi test suites, how they compete on power and TLS performance, and whether that offsets cyclicality in wireless and service provider spending.

Viavi Solutions' current analyst narrative points to revenues of US$2.5b and earnings of US$503.0m by 2029, built on forecast revenue growth of 18.0% per year, compared with earnings today of a US$30.4m loss. This implies an earnings swing of about US$533m if those consensus estimates are met.

Uncover why Viavi Solutions' fair value indicates a 39% potential upside to its current price that could narrow quickly.

Exploring Other Perspectives

Some of the most optimistic analysts focus on Viavi Solutions’ margin story rather than just CF50 or the Calnex partnership. They were already modeling revenue of about US$2.7b and earnings near US$1.1b by 2029, far above the consensus US$2.5b and US$503.0m. You can treat this CF50 and Calnex news as a fresh test of which storyline holds up.

Explore 3 other Viavi Solutions fair value estimates, including one that suggests as much as 59% upside from the current price.

Reach Your Own Conclusion

Don't just follow the ticker. Dig into the data and build a conviction that's truly your own.

• A great starting point for your Viavi Solutions research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• See our latest analysis for Viavi Solutions. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate Viavi Solutions' overall financial health at a glance.

Looking For More Ideas Beyond Viavi Solutions?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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