Shares of Viavi Solutions surged 7.2% to $40.47 in pre-market trading Thursday, extending a rally that has pushed the stock up roughly 25% in nine sessions. The catalyst: the company reported fiscal Q4 revenue of $443.1 million, up 52.5% year-over-year, with non-GAAP earnings per share of $0.34 — comfortably beating the consensus estimate of $0.30. For shareholders, the print validates a transformation story that hinges on two fast-moving markets: AI data-center testing and defense electronics.

  • The Earnings Beat Was Driven by a Single Powerhouse Division. The Network and Service Enablement (NSE) segment generated $353.9 million in revenue, up 69.2%, supplying roughly 95% of total year-over-year revenue growth. Its operating margin jumped to 20.0% from just 4.6% a year ago.

Data-center customers now account for about 50% of NSE revenue, with aerospace and defense adding another 17%. That concentration means VIAV's trajectory is tied directly to hyperscaler capital-spending plans — a strength today but a risk if AI infrastructure budgets cool.

  • Spirent Is Integrating Ahead of Schedule — and That Matters for Margins. VIAV paid $425 million in cash last October for Spirent's high-speed Ethernet and network security testing lines.

The deal is integrating ahead of schedule and contributing meaningfully to NSE revenue and profitability.

Combined synergies and restructuring savings are expected to total about $30 million annually.

Full-year operating margin hit 20.6%, up 630 basis points year-over-year , signaling the acquisition is already boosting the bottom line, not diluting it.

  • Analysts See 60% More Upside — but the Stock Still Trades at a Deep Discount. Seven of eight covering analysts rate VIAV a buy, with a consensus price target of $64.57 — implying about 60% upside from current levels.

Susquehanna recently raised its target to $66. The gap between Wall Street's targets and the share price reflects lingering skepticism about whether this growth rate is sustainable once the initial Spirent revenue bump normalizes.

  • Management Signaled the Momentum Continues. CEO Oleg Khaykin said performance "exceeded expectations" and that the diversification into data-center and defense markets "will continue driving growth for the next several quarters."

The company raised its Q1 fiscal 2027 margin guidance , although some near-term uplift comes from tariff refunds and an extra fiscal week — mechanical boosts rather than purely structural improvements.

The bottom line: VIAV delivered a blockbuster quarter, but investors must now decide whether a test-equipment company riding the AI infrastructure wave deserves a premium valuation — or whether the easy gains from Spirent are already in the price.