COHR
AI demand: the good kind of traffic jam
Coherent basically walked into earnings and said, “We’re sold out.” Q4 revenue hit a record $2.05 billion, helped by a 66% surge in Data Center revenue. That’s the kind of growth that makes investors sit up a little straighter, because it suggests the AI buildout is still very much in full sprint mode.
When the factory is the bottleneck
The spicy part isn’t just the sales growth. Fiscal 2027 is already effectively sold out, purchase orders are rolling into 2028, and long-term agreements stretch through the decade. In other words, customers aren’t shopping around with a “maybe later” vibe — they’re lining up early and locking in supply.
That matters because Coherent isn’t just selling more stuff; it’s also getting better at making it. Management highlighted six-inch InP, which delivers roughly four times the output at half the cost. Translation: more capacity without the same ugly cost headache. If that holds, you get the rare combo investors love — revenue growth plus margin leverage.
Why investors care
Gross margin expanded to 40.2%, which tells you this isn’t just a volume story. It’s a mix of demand strength, product leverage, and factory efficiency doing a little happy dance together.
Big picture: Coherent’s latest print reads like an AI infrastructure company discovering it has too many customers and not enough hours in the day. That’s not a bad spot to be in — unless you’re the factory planner.