Shares of optical component maker Finisar (FNSR) have been weak since the open today after MKM Partners lowered estimates, pointing to its “surprisingly negative” channel checks.

SURPRISING NEGATIVE: A recent look by MKM Partners revealed some “surprisingly negative” headwinds for the communications equipment maker, said MKM analyst Michael Genovese in a note out earlier. The analyst voiced concern on a number of fronts, “including China, for all products and 10G Datacom and Fibre Channel/SAN in the U.S. and Europe.” Genovese sees fourth quarter demand in China weak due in part to lower demand from Huawei with weakness in product demand across the board, including WSS,10G Datacom and Telecom, and CFP2. According to the note, FiberHome and ZTE are also sluggish for Finisar.

LOWER ESTIMATES AND PRICE TARGET: MKM Partners lowered fourth quarter estimates on the optical parts maker to 46c for earnings per share on revenue of $341M from the firm’s prior view of EPS of 53c on revenue of $372M. With that MKN dropped its price target to $32 from $41.

RAYMOND JAMES PUZZLED BY DECLINE: Raymond James analyst Simon Leopold said he has received “a lot of calls” on Finisar and that he is “puzzled” by the stock’s selloff as well. Attempting to deduce reasons for the weakness, Leopold said he has heard talk that Huawei is cutting spending, but he thinks this was built into the company’s guidance; he “suspects somebody is suggesting” Finisar’s legacy business is very weak, but said this has been the case for a while; and “some are claiming” the QSFP28 has issues, but his checks find it is fine and Cisco (CSCO) is “buying as many as it can.” Leopold keeps a Strong Buy rating on Finisar shares.

DATACENTER DEMAND: Share prices in the optical parts group jumped last week after peer Applied Optoelectronics (AAOI) said it expects first quarter revenue to exceed guidance. “We delivered another strong quarter with our top and bottom-line results expected to exceed our guidance,” said Dr. Thompson Lin, Applied Optoelectronics’ founder, president and CEO, last week. “Our results were driven by continued robust demand for our market-leading datacenter products and solid execution. We are pleased with our momentum and look forward to sharing the additional details of our first quarter performance on our conference call in May.”