SAXONBURG, Pennsylvania, May 10, 2026, 11:00 EDT
- Coherent shares finished Friday at $335.26, up 5.03%, clawing back some ground after Thursday’s post-earnings slide.
- Fiscal third-quarter numbers and guidance kept the focus on demand for AI data-center optics—a market where Nvidia is backing growth via supply agreements.
- Execution is the big swing factor here. Coherent needs to ramp up capacity quickly, but margins, trade regulations, and customer appetite are all still in flux.
Coherent Corp bounced back on Friday, with shares climbing 5.03% to finish at $335.26 after a rough earnings reaction that saw the stock tumble 7.39% the day before. Investors looked past the immediate hit, focusing instead on whether the appetite for AI data-center optics will continue to outstrip the company’s ability to keep up. U.S. markets didn’t open on Sunday.
Why does this matter now? It isn’t just another quarterly update. Coherent, known for its lasers, transceivers, and optical networking hardware, has found itself embedded in the behind-the-scenes infrastructure of AI data centers. Here, optical connections—relying on light, not electricity—carry data between chips and racks. Nvidia, for its part, said in March it would pour $2 billion into Coherent and lock in multibillion-dollar orders for advanced laser and optical networking gear.
Coherent turned in fiscal third-quarter revenue of $1.81 billion, a 20.5% jump from last year. GAAP gross margin climbed to 37.7%. Adjusted earnings landed at $1.41 a share—non-GAAP, so certain standard costs aren’t in the mix. Looking ahead, management sees revenue landing between $1.91 billion and $2.05 billion for the current quarter, with adjusted earnings projected at $1.52 to $1.72 per share.
Chief Executive Jim Anderson credited “another quarter of strong financial performance,” saying revenue gains picked up speed, margins widened, and profitability improved. He flagged data-center and communications demand as key factors. Over on the finance side, Chief Financial Officer Sherri Luther said Coherent was “ramping” up capital spending to boost capacity. Coherent Inc
AI-related infrastructure now dominates the company’s portfolio. In the March quarter, Datacenter and Communications revenue reached $1.36 billion, up from $969 million a year ago. Industrial revenue, on the other hand, slipped to $444 million from $529 million. Coherent noted it’s increasing indium phosphide capacity at its Sherman, Texas location—a move centered on the semiconductor material used in high-speed optical gear.
During the earnings call, Anderson noted that Data Center and Communications made up 75% of total revenue for the quarter. Orders jumped again, described as a “step-function increase,” and the backlog hit new highs. He added that shipments had started for transceivers built with parts from the company’s newer 6-inch lines—a point investors are tracking closely, since larger wafers can boost throughput and lower costs. The Motley Fool
Wall Street’s take wasn’t unanimous. Rosenblatt bumped its Coherent price target up to $425 from $375, sticking with a Buy and pointing to transceivers and optical circuit switching—tech that moves data via light, not just electronics—as key fourth-quarter drivers. According to a note highlighted by Investing.com, margins could be more likely to hit the upper end of Coherent’s 39% to 41% guidance band this time.
Other names in the space are flashing similar signals. Lumentum, which also supplies optical components for AI hardware, posted fiscal third-quarter revenue of $808.4 million, a jump of 90.1% from last year. For the June quarter, the company projected revenue between $960 million and $1.01 billion. CEO Michael Hurlston pointed to pricing discipline and shifts in product mix as drivers for the margin gains.
The supply chain isn’t standing still, either. Corning and Nvidia announced last week plans for Corning to ramp up its U.S. optical connectivity output by a factor of ten and boost domestic fiber production over 50%, adding three new facilities in North Carolina and Texas. Coherent’s update, then, is playing into a broader scramble for optical capacity to feed AI infrastructure—not just a story about one company’s earnings.
Still, this is a packed trade, and the risks are right out in the open. Coherent told investors tariffs and export rules didn’t have much impact on third-quarter numbers. Even so, the company warned that any ongoing turmoil in global trade could bump up costs, slow output, or hit revenue. Late capacity, a demand slip, or margins falling short of the high end—any one of those could put the stock’s AI premium on the line fast.
