Why Is COHR Stock Up Over 5% Overnight?

• Coherent’s Q1 revenue rose 50% to $2.37 billion, beating expectations of $2.31 billion.
• Marvell’s bid for Lumentum has revived the focus on the optical networking industry and its key players.
• Retail sentiment for COHR climbed higher in the ‘extremely bullish’ zone.

Coherent (COHR) issued an upbeat fiscal first-quarter report and forecast sales and profits above expectations on Wednesday, sending its shares more than 5% higher in overnight trading – a bright spot amid a rout in AI infrastructure stocks as investors parsed the midterm election results.

Coherent’s revenue rose 50% to $2.37 billion, beating expectations of $2.31 billion from FactSet. Adjusted earnings per share also beat expectations by 10 cents at $2.09.

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For the second quarter, Coherent expects earnings between $2.28 to $2.48 a share and revenue between $2.55 billion and $2.75 billion, compared to analysts' expectations of $2.21 per share profit and $2.54 billion in sales, respectively. Notably, the company said its fiscal 2027 revenue will grow more than 60%. On a pro forma basis.

“Our established businesses delivered strong growth, while new growth areas are beginning to ramp,” CEO Jim Anderson said in the earnings statement. “As AI data centers transition from copper to optical connectivity, Coherent’s broad photonics platform and manufacturing scale position us to help customers meet rising needs for bandwidth and energy efficiency.”

Marvell-Lumentum Deal Revives Focus On Optical Players 

Coherent makes lasers, optical components, and materials used in data centers, and communications and industrial equipment – increasingly viewed as crucial to next-generation data transmission as data centers grow larger and more sophisticated.

Investor focus on the optical components space as well as Coherent, has grown after chipmaker Marvell Technology (MRVL) agreed to buy Coherent rival Lumentum Holdings (LITE) in an all-stock deal worth $115 billion, announced earlier this week.

$COHR became a lot more valuable after the $LITE deal was announced,” The Futurum Group CEO Daniel Newman said in an X post. 

“This quarter was another very good effort beating expectations. The optical impact is probably still a little underappreciated and Coherent is now one of a very small number of companies with a portfolio to realize this opportunity over the next few years.”

Lumentum stock is up 200% in the past 12 months while Coherent shares have gained nearly 50%, signaling investor interest in the industry.

On Wednesday, The Information reported that Lumentum could attract rival bids from Advanced Micro Devices (AMD), Intel (INTC), or Nvidia (NVDA), potentially sparking a bidding war as doubts emerge over Marvell’s offer. 

Retail View On COHR

On Stocktwits, the retail sentiment for COHR climbed higher in the ‘extremely bullish’ zone.

“$COHR Once this dem sweep noise goes away, this will move to where it deserves to be $240+,” a trader said, referring to Democrats' victory pressuring AI-linked stocks.

Another wrote: “$COHR great earnings, back to 400s in 2027.” COHR shares are up nearly 6% year to date as of their last close.

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