Ciena has strong AI-driven growth but is risky due to high valuation multiples and heavy reliance on few customers in a historically volatile industry.

Fourth, the network. Sienna, ticker CN. AI isn't trained on one computer. It uses thousands of them talking to each other instantly over glass fiber cables. Sienna makes the gear that carries all that data at the speed of light.

Bigger AI means a lot more of this networking. The risk. This is exactly the same industry as global crossing, famous for giant booms and giant buss, and it relies heavily on just a couple of massive customers.

All right, next. Sienna, our networking company. This is probably the cleanest AI story of the whole group. It just reported earnings and revenue grew 37% while its profits soared over 200%.

Its core optical networking business grew about 46%. Management raised its fullear forecast to 6.42 billion, roughly 35% growth for the year. And it has said that AI is driving wave after wave of new spending.

But remember the lesson from earlier in this video. This is the same type of industry that blew up once before. And just two customers for this company make up over 40% of its revenue.

So is it truly different this time versus 25 years ago.

So it's time to open up. So here is Sienna Corp. Exactly $50 billion market cap business. And something I love guys, their enterprise value is 52.3. That's only $2.3 billion of debt.

That's great when looking at their one-year free cash flow of $800 million, but their 5-year average is 315. So, it shows how much this company has grown as of late. It is selling for 61 times free cash flow.

It is selling for 160 times the 5-year free cash flow. Its profit in the last 10 years was 8 and a half%, last year 10.9 and the last 5 years 6%. Returns on capital getting better. 5-year average was 7%.

One year is 14.2. And guys, I'm actually surprised by the revenue growth. It's not as great as I would have thought. It's 12.5% for the last 3 years, 12% a year for the last 5, 8.9% for the last 10 years.

So, obviously, the real growth has come in the last few quarters because we saw how much their revenue is up year-over-year.

Let's pull up these eight pillars. Wait. Okay, remember this one's based on lower free cash flow the last five years. The return the ROIC is based on five years. There's a lot of misleading data here.

If you believe that the next 5 years is going to look similar to the recent year and higher. That's the question we always have to ask ourselves when we're doing these kind of things.

So, let's look at analyst estimates here. Analysts Oh, wow. Look at this. Analysts have profit growing from 670 per share to $23 over the next seven years. Wowza, that's three time over three times growth over the next seven years and revenue growing from 6.46 to 14.6 over the next seven years. So over double there.

All right, so let's go to our stock analyzer tool. So guys, I've done this company before. Let's stick with my old numbers. I did 4, 9, and 14% revenue growth. I did seven, eight, and nine% profit and free cash flow because look at it right here.

Yes, recently it's been skewed, but I wonder if it's because of what's going on right now in AI. So, they're demanding higher prices and therefore more margin.

Next, what profit would I show? What PE would I assign to this company 10 years from now? Guys, the returns on capital aren't great before this last year. So, I'm actually going to make this a little bit lower.

I'm actually going to go 14, 17, and 20. might seem low, but if these returns on capitals don't get up there, it's got to stay lower. And then again, my 9 and a half% return. I hit the analyze button.

Boom. I have a low price of 44, high price of 150, middle price of 83. You might think I was being too conservative, but even if you make your numbers a little bit better, these are still going to be read anyhow.