The analyst believes VIAV is insulated from negative impacts affecting optical transceivers and expects complexity increases to support demand for VIAV's testing and validation products, indicating a bullish stance and no intention to sell.
VIAV sells test/measurement/validation/lab tools rather than optical transceivers, so it is less impacted by declines in optical ports. Increased complexity from MRC/RNG raises validation complexity, supporting demand for VIAV's products. Architectural changes increase the value of testing and fault analysis, offsetting hardware reductions.
Not at all in my view... VIAV is actually much more insulated from that than you'd imagine, and there's even a complexity argument where they benefit. VIAV is not selling the actual optical transceivers that would be displaced... they sell stuff in the test/measurement/validation/assurance/lab tools categories. Yeah, sure, depression in optical-ports could impact test demand tied to 800G/1.6T module volumes, but MRC/RNG also RAISES validation complexity, which would support VIAV’s lab and protocol-test demand... That's my view. Now, that being said, it could be impacted in the short-term stock-wise just from a "babies being thrown out with bathwater" perspective, because it does often get treated as an optical/photonics stock, but if you look at it from a purity standpoint and actually product/services standpoint, they're not nearly as impacted as the actual transciever names, and even then, the overall impact is ambiguous because of the potential complexity tailwind... the architectural change increases the value of testing, simulation, interoperability and fault analysis. MRC and RNG reduce some hardware layers, but they do not reduce network complexity... I won't be selling any VIAV based on that piece....
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | -5.2% | -4.7% |
| 1 week | -3.5% | -3.3% |
| 1 month | — | — |
| 3 months | — | — |
| 6 months | — | — |