Shares of Ciena advanced Monday after the stock was upgraded as optical networking has started to be a critical issue for the artificial-intelligence buildout.

Evecore ISI analyst Amit Daryanani on Monday upgraded Ciena to Outperform from In Line and raised his price target to $550 from $375. That price target represented 58% upside from the closing price of $348.80 on Friday.

"We see CIEN as an attractive way to gain exposure to the optical networking space that is quickly emerging as a critical bottleneck in the AI buildout," Daryanani wrote.

Ciena stock rose 5.7% to $369 in premarket trading on Monday. Shares have fallen about 9% in September as the closing bell on Friday but have risen 49% this year.

Daryanani wrote that connectivity between and inside data centers has become an increasingly "critical gating factor" for frontier large language model monetization. The analyst added that this problem is something Ciena is "purpose built to address as the only fully dedicated optical systems provider."

Optical networking companies have become a major part of the AI trade as the data-center buildout has boosted demand for fiberoptic cables that transit data between and beyond data centers.

Evercore ISI expects this dynamic to continue and to drive upside performance for Ciena stock.

Fellow optical networking stocks Corning and Coherent rose 4.1% and 3%, respectively. Lumentum rose 2%.