TLDR
- Coherent stock jumped 17.6% on June 2 after Nvidia CEO Jensen Huang highlighted the growing importance of optical networking for AI data centers.
- The stock hit a new 52-week high of $440 on June 3 and is up 108% year-to-date in 2026.
- Q3 fiscal 2026 revenue came in at $1.81 billion, up 21% year-over-year, beating estimates of $1.78 billion.
- Non-GAAP EPS rose 55% year-over-year to $1.41, while the Data Center and Communications segment surged over 40% YoY to $1.36 billion.
- Nvidia made a $2 billion equity investment in Coherent and signed a multi-year supply agreement as part of a strategic partnership.
Coherent (COHR) stock got a big boost on June 2 when Nvidia CEO Jensen Huang praised Marvell and highlighted optical networking as a key pillar of next-gen AI data center infrastructure. While Huang’s comments were aimed at Marvell, the spotlight landed on the whole sector — and Coherent was one of the biggest winners.
COHR surged 17.6% that day and went on to hit a 52-week high of $440 on June 3. The stock has now climbed 108.11% year-to-date, compared to the S&P 500’s 10.11% gain over the same period.
Over the past 12 months, Coherent is up 370.55%. That easily dwarfs the broader market’s 26.24% return in the same window.
COHR is currently trading about 10.6% below that fresh 52-week high.
Q3 Results Show Accelerating Growth
Coherent reported fiscal Q3 2026 results on May 6 that beat estimates on both revenue and earnings. Revenue of $1.81 billion was up 21% year-over-year and topped the $1.78 billion consensus. Non-GAAP EPS came in at $1.41, up 55% YoY, edging past the $1.39 estimate.
The Data Center and Communications segment was the engine behind the quarter, generating $1.36 billion — more than 40% growth year-over-year — and accounting for roughly 75% of total revenue.
Demand for 800G and 1.6T transceivers drove strong sequential growth in the data center business. Revenue there climbed 13% sequentially and 37% year-over-year. The communications side also delivered, up 16% sequentially and 60% year-over-year.
On the bottom line, GAAP net income came in at $0.97 per share, reversing a loss of $0.11 per share in the same quarter last year. Non-GAAP gross margin reached 39.6%.
Nvidia Partnership and Capacity Expansion
During the quarter, Coherent announced a strategic partnership with Nvidia focused on advanced optical networking and co-packaged optics (CPO) for AI data centers. Nvidia made a $2 billion equity investment in Coherent and signed a multi-year supply agreement running through the end of the decade.
The company ended Q3 with $3 billion in cash, up from $1.5 billion the prior quarter, largely due to that Nvidia investment. Coherent also cut its debt leverage ratio from 1.7 to 0.5 after paying down $162 million in debt.
On the manufacturing side, Coherent said it expects to double its internal indium phosphide output capacity by the end of 2026 — one quarter ahead of schedule — and plans to more than double it again by end of 2027.
Management raised its estimate of the optical circuit switching (OCS) market opportunity to over $4 billion and said it expects initial co-packaged optics revenue to ramp in the second half of 2026.
For Q4 fiscal 2026, Coherent guided revenue of $1.91 billion to $2.05 billion, with non-GAAP EPS of $1.52 to $1.72 and non-GAAP gross margins of 39% to 41%.
Bookings hit record levels in Q3, and management said the backlog now extends into 2028, with long-term agreements running through the end of the decade.
Wall Street holds a consensus “Strong Buy” on the stock. Of 22 analysts covering COHR, 15 rate it Strong Buy, one rates it Moderate Buy, and six say Hold. The Street-high price target sits at $461.96.
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