Coherent secured up to $50 million in government funding to expand its AI optical networking facility tied to a NVIDIA partnership but saw its shares plunge 7.5% in a single session. The drop outpaced the S&P 500’s 0.6% decline and mirrored peer LITE’s 8.6% slump despite 18.0% revenue growth and a 7.1% net margin.
Coherent signed a letter of intent for up to $50 million in government-backed funding to expand a key manufacturing facility supporting optical networking gear for AI datacenters. The expansion is directly linked to the company’s partnership with NVIDIA, aimed at meeting surging demand for high-speed data transmission components.
Despite the positive catalyst, Coherent’s stock fell 7.5% in one trading session, significantly underperforming the S&P 500’s 0.6% decline. Peer LITE experienced an even steeper 8.6% drop, indicating a broader sector sell-off that outweighed company-specific news.
Coherent’s shares have surged from $79.77 to $426.89 over the past year, pricing in aggressive growth expectations. With a market capitalization above $72.8 billion and fundamentals showing 18.0% revenue growth and a 7.1% net margin peak, investors appear to be selling the news rather than rewarding incremental funding.
