Ciena (CIEN)

The sleeper story here is that Ciena just won the first major distributed GPU training infrastructure deal, opening a massive new TAM beyond traditional data center interconnect that nobody's modeling yet. Yes, cloud revenue hit records at $400M, but gross margins collapsed 370 bps from mix and they stopped disclosing DSO after being asked directly about working capital, classic obfuscation. The binding constraint is their supply chain: they're building backlog faster than they can ship, which explains both the strong orders and the margin pressure from low-margin RLS sales to secure future transponder revenue. Most revealing quote: 'We absorbed a net impact in the mid-single-digit millions' on tariffs while claiming it's 'immaterial,' except that's 16% of quarterly earnings. My view changes if gross margins don't inflect by Q4 or if they keep dodging working capital questions next quarter.