Shares of Ciena rose 1% Thursday after the networking company reported better-than-expected quarterly earnings and raised fiscal-year revenue guidance as artificial-intelligence continued to drive demand for its products.

The company posted adjusted earnings of $2.11 a share in the fiscal third quarter ended Aug. 1, up from 67 cents a year ago and above Wall Street's expectation of $1.73. Revenue grew 37% to $1.67 billion, beating the analyst consensus call for $1.64 billion, according to FactSet.

"AI continues to drive compounding waves of network investment," CEO Gary Smith said in a press release. "As the only pure-play optical systems and interconnects provider, Ciena's unmatched combination of incumbency, technology innovation, and deep expertise gives us a powerful competitive edge."

Wall Street was particularly interested in guidance heading into earnings as a gauge of how robust data-center demand remains.

Ciena satisfied Wall Street on that front.

The company raised its fiscal-year revenue guidance to $6.42 billion at the midpoint, up from $6.3 billion and above Wall Street's forecast of $6.34 billion. Ciena also said it expects fiscal fourth-quarter revenue of $1.75 billion at the midpoint, which is also above the consensus forecast of $1.7 billion.

Ciena stock gained 3% to $365 in premarket trading on Thursday after ending Wednesday down 1.7%. Shares had advanced 51% this year as of the closing bell on Wednesday on the back of strong demand from AI and data-centers for cabling and communications systems. The stock, however, has declined 43% since June 2.