On the other hand, Alex Henderson with Needham & Co., who has a Buy rating on Infinera shares, thinks the reaction has been a bit much:

We are completely surprised. Not by the announcement, but by the reaction. In our opinion, the short reach Data Comm products were inevitable and there is likely more variants beyond the one that got the attention at OFC and announced by Microsoft and Inphi. The Data Comm products are low cost for short distances up to 20-40 KM. While the Microsoft Inphi announcement suggested viability to 80KM we think that is highly improbable outside of lab conditions. The vast majority of the DCI and Metro markets require coherent not Data Comm modulation technologies and these are the link lengths targeted by Ciena and Infinera.

Complete blog:

blogs.barrons.com/te...ptics/