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Comms Hardware Midcaps Show Life Again

Written by The Street Brief

Stocks and Technology

June 27, 2026

Intertwined cables form a bold upward arrow, with a rack switch at the base and a small cable node beneath the rise.

Key points

  • Extreme Networks guides fiscal Q4 revenue $330 to $335 million, shares sit about 1.7% below a 52-week high.
  • Digi International raised fiscal 2026 outlook to 20% to 22% revenue growth and 25% annualized recurring revenue growth.
  • Harmonic cited $582 million in backlog and lifted its Broadband revenue outlook.
  • Viavi’s one-year return near 380% despite management warning of limited near-term visibility.

Communication equipment has crept back toward leadership, with several midcap names pressing or taking out one-year highs. The question is whether improving price action will meet fundamental follow-through as order visibility and margins get tested into the next print cycle.

Three pockets stand out: networking campus gear, IoT connectivity hardware with recurring software, and broadband access platforms tied to cable upgrades. The group’s relative strength has improved in recent months even as volatility stays elevated. That same orders-must-confirm dynamic shows up in PDF Solutions at Highs, Orders Are the Test and in coverage like Lab Tools Break Out, Now Orders Must Confirm.

Extreme Networks: momentum into guidance

Extreme Networks ( $EXTR Extreme Networks, Inc. $31.74 ) has rallied to within roughly 1.7% of its 52-week high after a three-month climb of about 105%. Management’s late-April update targeted fiscal Q4 revenue of $330 million to $335 million and a full-year revenue range around $1.28 billion, alongside gross margin a little above 61 percent.

Why it matters now. Those targets, if delivered, would support the view that the business has reset to a higher gross-margin baseline while demand stabilizes. What investors may want to hear next is whether large campus and cloud deals are converting cleanly and whether backlog commentary tightens. If the company can pair stable gross margin with evidence of healthy orders, the recent momentum could have room.

Digi International: new highs with recurring mix

Digi International ( $DGII Digi International Inc. $70.55 ) has broken out to a fresh 252-day high and shows a one-year return of about 103%. In May, management lifted its fiscal 2026 outlook, guiding for revenue growth of 20% to 22% and annualized recurring revenue growth of 25%, citing durable demand for hardware-enabled software in connected operations. Execution risk is real. A tighter enterprise spending backdrop or slippage in large deployments could pressure second-half targets, so investors should listen for any change in bookings cadence or in the mix of hardware versus software as a margin tell.

Viavi Solutions: big run, visibility caveat

Viavi Solutions ( $VIAV Viavi Solutions Inc. $47.63 ) has been one of the group’s strongest stocks, with a one-year return of about 380% even after a recent pullback. For the fourth quarter of fiscal 2026, the company guided revenue to the low-to-mid $400 million range but also noted limited visibility across several product lines and significant in-quarter book-and-ship dynamics that can swing results.

Harmonic: backlog supports cable-access case

Harmonic ( $HLIT Harmonic Inc. $14.90 ) raised its full-year Broadband outlook and highlighted record backlog in its latest report. Backlog and deferred revenue totaled $582 million, bookings were healthy, and its cOS software, Harmonic’s cloud-native cable-access platform, was commercially deployed with about 150 customers serving more than 45.7 million cable modems.

Shares have rebounded, up about 58% over three months, as investors handicap the pace of broadband and Data Over Cable Service Interface Specification (DOCSIS) projects, the cable-modem standard many operators use. The swing factor is still operator capex timing.

If large customers keep pacing projects conservatively, near-term margins can be noisy even with strong backlog. Conversely, a steadier deployment cadence would support Harmonic’s raised Broadband targets.

Key datapoints: bookings, backlog and margins

Across the group, the most telling datapoints are bookings, backlog or book-to-bill where disclosed, and gross-margin commentary. Management teams have also flagged two shared risks worth watching, namely uneven telecom and cable capex and product-mix swings that add quarter-to-quarter noise.

If project timing improves and margins hold reset levels, the case for a second leg up in communication-equipment midcaps strengthens. For now, the leadership move functions as a research signal that still requires fundamental confirmation.