Coherent Pulls Back After 15.44% Surge on Nvidia’s $2B Optics Deal
Coherent surged 15.44% after unveiling a multiyear optics agreement with Nvidia featuring a multibillion-dollar purchase commitment and a $2 billion investment for R&D and U.S. capacity expansion. In February the company reported $1.29 EPS on $1.69 billion revenue, beating estimates by 6.8% and 3.0%, respectively.
1. Strategic Nvidia Agreement
Coherent entered a multiyear nonexclusive agreement with Nvidia to develop next-generation laser and optical networking products for AI data centers, securing a multibillion-dollar purchase commitment for advanced optics.
2. Nvidia’s $2B Investment
Nvidia will invest $2 billion in Coherent to support research and development initiatives, expand U.S. manufacturing capacity, and fund future operations as part of the optics collaboration.
3. Earnings Beat Expectations
In its February quarter, Coherent reported EPS of $1.29 versus a $1.21 estimate and revenue of $1.69 billion versus a $1.64 billion forecast, marking beats of 6.8% and 3.0%, respectively.
4. Technical Trends and Analyst Ratings
Shares are trading above their 20- and 100-day simple moving averages and near 52-week highs; analysts maintain a Buy consensus with an average price target of $206.36 and recent target increases up to $250.