© Reuters. Viavi Solutions (VIAV) surges 15% following Stifel upgrade

Shares of Viavi Solutions (NASDAQ:) surged more than 15% Monday after analysts at Stifel upgraded the stock to Buy from Hold, raising the price target to $13 from $15 per share.

Analysts, who headed the note, said the company is “broadening the broadening of AI theme.”

“While the company is coming off of a challenging C2023, in which top-line revenue declined 19% y/y and non-GAAP EPS contracted 55%, we think the worst is behind,” wrote the analysts.

In addition, the firm expects a modest revenue recovery in C2024 for the company, with earnings “likely to accelerate at a significantly faster rate” as revenue normalizes.

“In 2023, VIAV shares declined 4%, significantly underperforming the broader technology peer group. Irrelevant within the broader AI backdrop,” the analysts added.

Stifel believes a lot of the company’s bad news is already priced in, and looking ahead, they believe that VIAV will play a role in their “broadening of AI” theme as the use of high-speed interconnect technologies accelerates and testing requirements become increasingly complex.