COHR
The stock got hit, the thesis didn’t flinch
Coherent just took a 34% haircut, which is the kind of move that makes investors wonder if the story broke or just got tossed in a blender. The answer, at least from the bullish camp, is apparently the latter: the company still has a Buy rating because the underlying business is moving in the right direction.
Why the bulls are hanging on
The numbers are doing a lot of the heavy lifting here. In Q3 FY26, revenue climbed 20.5% year over year to $1.81 billion, with data center and communications revenue up a very spicy 41%. Non-GAAP EPS also jumped 55% year over year, which is the sort of combo platter analysts like to wave around when they want to say, “No, really, the model is working.”
And this isn’t just a one-quarter sugar rush. The bull case leans on a few longer-term growth engines:
- InP transceiver execution is improving
- The Nvidia partnership adds credibility in AI infrastructure land
- The total addressable market is expanding in CPO and OCS
- Apple-related agreements add another layer to the growth stack
What investors should keep an eye on
This is one of those situations where the market may have gotten ahead of itself on the downside. Sure, the stock got punched in the mouth, but the fundamental story still looks intact — and maybe even stronger than the share price suggests.
If Coherent keeps converting its end-market exposure into real revenue and margin momentum, the current drawdown could end up looking more like a mood swing than a thesis change. Big picture: the market can stay dramatic longer than your patience, but the business here is still doing the work.