On September 4, Coherent rose 3.11% in pre-market trading, trading at approximately $273.00/share, with turnover of $3.30 million. The rebound followed a research note from Deutsche Bank identifying optical networking hardware makers as the biggest beneficiaries of the AI era, with Coherent and Lumentum named as top picks.

The endorsement injected fresh confidence into the optical communication sector, which had been under sustained selling pressure since late August. Coherent had declined across multiple consecutive sessions after peer Credo Technology plunged over 20% on disappointing optical product revenue forecasts and margin guidance cuts, triggering broad sector sell-offs. Additional pressure came from profit-taking following the post-NVIDIA earnings catalyst fade, with peers including Applied Optoelectronics and Lumentum also retreating sharply.

Coherent had accumulated gains exceeding 60% year-to-date prior to the pullback. The company reported results in mid-August that beat expectations across the board, though margin performance sparked some debate. Institutions broadly remain constructive on the optical communication upcycle, supported by ongoing AI compute infrastructure expansion driving demand in segments such as co-packaged optics.

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