Quick Overview
- Shares of Coherent rocketed 17.6% higher on June 2 following comments from Nvidia CEO Jensen Huang about optical networking’s critical role in AI infrastructure.
- COHR reached a fresh 52-week peak of $440 on June 3, marking a 108% gain for the year 2026.
- Fiscal Q3 2026 revenues totaled $1.81 billion, reflecting 21% annual growth and surpassing the $1.78 billion analyst forecast.
- Adjusted earnings per share climbed 55% year-over-year to $1.41, while the Data Center and Communications division grew more than 40% YoY to $1.36 billion.
- A $2 billion equity stake from Nvidia, coupled with a long-term supply contract, solidifies the strategic alliance between the companies.
Coherent (COHR) stock experienced a significant rally on June 2 after Nvidia’s CEO Jensen Huang emphasized the vital importance of optical networking technology during remarks about AI data center evolution. Though Huang specifically mentioned Marvell, his commentary lifted the entire optical networking space — with Coherent emerging as a major beneficiary.
COHR shares skyrocketed 17.6% during that trading session and subsequently touched a 52-week high of $440 on June 3. Year-to-date in 2026, the stock has delivered a remarkable 108.11% return, vastly outperforming the S&P 500’s 10.11% advance during the identical timeframe.
Looking at the trailing twelve-month period, Coherent has soared 370.55%, dramatically exceeding the broader market’s 26.24% performance over those same months.
Currently, COHR is trading approximately 10.6% beneath its recent 52-week peak.
Fiscal Q3 Demonstrates Strong Momentum
Coherent unveiled its fiscal third quarter 2026 financial results on May 6, surpassing Wall Street expectations on both top and bottom lines. The company posted revenues of $1.81 billion, representing 21% year-over-year expansion and exceeding the analyst consensus of $1.78 billion. Adjusted earnings reached $1.41 per share, up 55% from the prior year and beating the $1.39 estimate.
The Data Center and Communications business unit served as the primary growth driver, delivering $1.36 billion in revenue — reflecting greater than 40% annual growth — and representing approximately 75% of total company sales.
Robust customer demand for 800G and 1.6T transceiver products fueled impressive sequential gains across the data center business. That division’s revenue increased 13% from the previous quarter and 37% versus the year-ago period. Meanwhile, the communications segment also performed well, posting 16% sequential growth and 60% year-over-year expansion.
On profitability metrics, GAAP net income registered $0.97 per share, a dramatic turnaround from the $0.11 per share loss recorded in the comparable quarter of the previous fiscal year. The company’s non-GAAP gross margin expanded to 39.6%.
Strategic Nvidia Alliance and Production Scaling
During the third quarter, Coherent unveiled a strategic collaboration with Nvidia centered on next-generation optical networking solutions and co-packaged optics (CPO) technology for AI-driven data centers. Nvidia committed $2 billion in equity capital to Coherent while simultaneously executing a multi-year procurement agreement extending through 2029.
The company concluded Q3 with $3 billion in cash reserves, up from $1.5 billion in the preceding quarter, primarily attributable to the Nvidia capital infusion. Coherent also strengthened its balance sheet by reducing its debt leverage ratio from 1.7 to 0.5 following the retirement of $162 million in outstanding obligations.
On the production front, Coherent announced it anticipates doubling its in-house indium phosphide manufacturing capacity by the conclusion of 2026 — one quarter earlier than originally projected — with plans to more than double that expanded capacity again by the end of 2027.
Executives increased their addressable market estimate for optical circuit switching (OCS) to over $4 billion and indicated that initial revenue from co-packaged optics products should begin ramping during the second half of 2026.
For the fourth quarter of fiscal 2026, Coherent provided guidance calling for revenues between $1.91 billion and $2.05 billion, with adjusted EPS projected at $1.52 to $1.72 and non-GAAP gross margins expected in the 39% to 41% range.
The company reported record-breaking bookings during Q3, with management noting that the current backlog now stretches into 2028, supported by long-term customer commitments running through the end of the decade.
Analyst sentiment remains overwhelmingly positive, with a consensus “Strong Buy” rating on the shares. Among 22 analysts following COHR, 15 assign it a Strong Buy rating, one rates it Moderate Buy, and six recommend a Hold position. The highest price target among Wall Street analysts stands at $461.96.
