The demand for its stock, reminiscent of the dot-com boom days, is all the more surprising as it has only a brief financial history and in 2006 lost $89.1m on revenue of $58.7m.
It indicates a widespread belief in Infinera’s claim that that photonic integrated circuits, or PICs, will fundamentally change optical communications networks in a fashion similar to the integrated circuit’s impact on electronics in the 1950s.
Infinera said its PICs, which transmit and receive at 100 Gigabits per second, incorporate the functionality of over 60 discrete optical components into a pair of indium phosphide chips the size of a child’s fingernail.
In its first quarter to March 31, revenue rose from $2.6m to $49.1m, though the net loss increased from $18.1m to $19.8m. But it has yet to find a broad market and said that in 2006, Level 3 Communications and Broadwing, which Level 3 bought in January, together accounted for 75% of its revenue.
That Infinera could be the next big thing has been fueled by a belief that soaring demand for bandwidth will boost the wavelength division multiplexing segment of the $12bn global optical communications equipment market, and therefore demand for its components.
Content-delivery network Limelight Networks Inc also had an enthusiastic reception and, after an IPO at $15 a share on Friday, rose 47.53% to $22.13.
With the 50% US households with broadband internet access in 2006 expected to reach 73% by 2010, it aims to cash in on demand from a wide variety of media organization for their content to be delivered over the internet.
