Shares of optical networking technology company Acacia Communications (NASDAQ: ACIA) jumped on Monday, rising as much as 15.9%. As of 2:30 p.m. EDT, the stock was up about 6%.
The stock's gain came after an analyst upgraded his rating on Acacia from hold to buy.
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In a note that covered Acacia and competitors Ciena (NYSE: CIEN) and Infinera (NASDAQ: INFN), Needham senior analyst Alex Henderson said he believes the industry landscape for these companies is improving. But Acacia's pace of digital signal processing (DSP) product launches is positioning the company to gain share from its competitors, Henderson noted (via TheFly).
Henderson upgraded his rating on the stock to buy and gave shares a 12-month price target of $59.
This bullish note from an analyst is likely welcome news to Acacia shareholders. Shares took a hit in April when the U.S. Commerce Department blocked American companies from selling products to one of Acacia's Chinese customers.
Nevertheless, analysts, on average, expect Acacia's second-quarter revenue to come in at $108.9 million, up about 68% year over year.
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