Network testing solutions company Viavi Solutions (NASDAQ: VIAV) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 42.8% year on year to $406.8 million. On top of that, next quarter’s revenue guidance ($432 million at the midpoint) was surprisingly good and 8.6% above what analysts were expecting. Its non-GAAP profit of $0.27 per share was 17% above analysts’ consensus estimates.

Is now the time to buy VIAV? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Viavi Solutions delivered first-quarter results that exceeded Wall Street’s expectations, with management attributing the outperformance to robust demand across its data center and aerospace and defense end markets. CEO Oleg Khaykin highlighted that growth was especially pronounced in the company’s Network and Service Enablement segment, fueled by surging investment in AI-driven data center infrastructure and new test requirements for advanced chip and optical module development. The recently acquired Spirent product lines contributed to the strength, expanding Viavi’s reach among enterprise customers and supporting increased adoption of high-speed Ethernet testing solutions.

Management’s forward outlook is built on continued strength in data center and aerospace and defense demand, with guidance reflecting confidence in both organic and acquired product momentum. Khaykin emphasized that new requirements for high-speed optical testing and growing complexity in chip-to-chip interconnects are expected to sustain elevated demand in coming quarters. He cited expanding opportunities linked to AI infrastructure buildouts and ongoing adoption of co-packaged optics and silicon photonics, noting, “We expect our data center and aerospace and defense end markets to be strong drivers for the foreseeable future.”

Key Insights from Management’s Remarks

Viavi’s leadership credited the quarter’s growth to accelerated AI data center buildouts, successful integration of Spirent, and rising demand for aerospace and defense solutions.

• AI-driven data center demand: Management described a surge in lab, production, and field product orders as hyperscale data centers ramp up investment in AI-focused infrastructure, with Viavi’s optical transport and protocol test solutions in particularly high demand.
• Spirent integration benefits: The acquisition of Spirent’s high-speed Ethernet product lines expanded Viavi’s installed base among enterprise and module vendors, and management reported early success in cross-selling and hardware-software integration efforts.
• Aerospace and defense growth: The company’s positioning, navigation, and timing products saw increased adoption, especially for drone and autonomous vehicle applications, with recent wins among U.S. Tier 1 defense customers.
• Broadening test requirements: Khaykin noted that growing complexity in chip packaging and co-packaged optics is driving new test insertion points, increasing Viavi’s relevance in manufacturing environments for both semiconductors and optical components.
• Stable but subdued wireless: Management acknowledged that demand for wireless test products remains weak but stable, while expressing optimism for eventual recovery as next-generation wireless technologies like 6G and AI-enabled RAN gain traction.

Drivers of Future Performance

Viavi’s guidance is anchored in sustained AI-driven data center investment and continued aerospace and defense adoption, but management also acknowledged evolving risks and shifting market cycles.

• Sustained AI data center tailwinds: Management expects high demand for test solutions supporting next-generation optical modules, chip-to-chip interconnects, and co-packaged optics to remain a primary growth engine, with broad adoption across hyperscalers, module makers, and semiconductor vendors.
• Aerospace and defense momentum: The company anticipates further gains in the aerospace and defense verticals, citing expanded relationships with Tier 1 defense contractors and growing use cases in autonomous systems, including navigation and sensor fusion technologies.
• Seasonality and wireless headwinds: While data center and defense are expected to offset seasonal slowdowns in service provider spending, management cautioned that the wireless segment’s recovery may be gradual, and that component supply constraints and restructuring impacts could create variability in margins and incremental profit flow-through.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will monitor (1) the pace and breadth of AI-driven data center investment and related product adoption, (2) ongoing momentum in aerospace and defense contracts, particularly in autonomous systems, and (3) signs of stabilization or recovery in the wireless segment. The integration of Spirent and its impact on cross-selling and incremental margin flow-through will also be key areas of focus.

Viavi Solutions currently trades at $56.89, up from $45.53 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

High Quality Stocks for All Market Conditions

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.