Shares of Acacia Communications (ACIA) are on the rise following William Blair analyst Dmitry Netis' comments on the company's design win with Facebook (FB). The analyst sees Facebook's white box transponder's incorporation of the company's AC400 module as a big win for Acacia. Moreover, Netis expects other internet players to follow the social media giant's path.

FACEBOOK VOYAGER: In a research note to investors this morning, William Blair's Netis noted that Facebook's white-box packet optical transponder for data center interconnect applications, called Voyager, will incorporate Acacia's AC400 transponder module, Broadcom's (AVGO) Tomahawk 25G Ethernet switch, an open line system with white boxes from Lumentum (LITE), as well as open software for end-to-end configuration from privately held SnapRoute. Facebook's Voyager should become a "disruptive force" in the optical networking market and represents a "major positive" for Acacia, Broadcom, and Lumentum, Netis contended. The analyst views Facebook's announcement last week as confirming his belief that Acacia is poised to benefit "disproportionately" from white-box optics that enable leading Web 2.0 operators to build bespoke optical networks. He reiterated an Outperform rating on Acacia's shares.

OTHERS TO FOLLOW: Netis also expects other internet players to follow the same path as Facebook, including Alphabet's Google (GOOG; GOOGL), Microsoft (MSFT) and Amazon (AMZN). The analyst told investors that he believes they will choose this approach as it speeds up innovation and democratizes the industry landscape by further squeezing out vendor margins and shifting purchasing power away from large switching and routing vendors, such as Cisco (CSCO) or Juniper (JNPR), and to a lesser extent optical system vendors, like Ciena (CIEN) or Infinera (INFN), which are much more used to telcos' price aggression. Further, Netis pointed out that he thinks they are much better positioned to move "up-the-stack" and embrace value-added packet technology. However, he expects the net winners to be the component and subsystem manufacturers like Acacia, Lumentum, and Finisar (FNSR).

PRICE ACTION: In late morning trading, shares of Acacia have gained almost 7% to $67.14.