Coherent Falls 12%, Lumentum Drops 7% as AI Optics Stocks Cool Ahead of Earnings
Two AI optics darlings that posted triple-digit gains this year are suddenly selling off hard, and the reason has less to do with bad news than with what investors are bracing for this week.
Shares of Coherent (NYSE:COHR | COHR Price Prediction) are sliding midday Monday, with Coherent stock down 12% to $333.83 as traders take profits across the AI optics complex. Lumentum Holdings (NASDAQ:LITE) isn’t far behind, with Lumentum shares off 7% to $830.05.
The pullback caps a parabolic multi-week run in the group. Coherent stock had rallied sharply into the week ending August 7, while Lumentum shares climbed alongside it.
The move looks like classic profit-taking and pre-earnings de-risking two richly valued AI optical-networking names, with no fresh negative headline behind it.
Profit-Taking After a Parabolic Run
Coherent stock is coming off a monster tear, up 105% year to date heading into today. Lumentum shares are even more stretched, with Lumentum stock having gained 142% year to date prior to today’s session.
Both names ran hard on a reported U.S. move to restrict Chinese optical transceivers. Community chatter has since turned to vague sector-rotation talk that weighs near-term supply-chain uncertainty against long-term AI-networking demand.
The valuation math also matters here. Coherent trades at a trailing 12-month P/E ratio of 159.96x, and Lumentum sits at 145.91x. Both names were priced for perfection heading into their next earnings reports, which helps to explain why they are selling off hardest today.
Earnings on Deck Explains the Split
The earnings calendar is doing a lot of the work behind today’s price moves. Lumentum reports its fiscal Q4 2026 results after the close on Tuesday, August 11, and Coherent follows with its fiscal Q4 2026 report after the close on Wednesday, August 12.
This helps to account for why another major AI optics name is barely budging. Applied Optoelectronics (NASDAQ:AAOI) shares are down just 1% to $133.63, as Applied Optoelectronics already delivered its report on August 6 and doesn’t have another earnings event coming soon.
Applied Optoelectronics is not profitable on a trailing-12-month basis, so there’s no TTM P/E ratio to anchor to. Overall, Applied Optoelectronics is insulated from the pre-earnings de-risking pressure that’s hitting Coherent and Lumentum this morning.
Sector Context and What to Watch
The broader chip complex is holding up better than the optics pure-plays, which tells you that this is optics-specific, not a broad semiconductor unwind. The iShares Semiconductor ETF (NASDAQ:SOXX) is down 1% to $536.94, a modest slip for a fund concentrated in large-cap chipmakers where optical-component names occupy only a small slice of the basket.
The iShares Semiconductor ETF carries an expense ratio of 0.33% and is still up 76% year to date. That relative calm underscores the point: investors are trimming stretched positions in the two optical suppliers most tied to NVIDIA‘s (NASDAQ:NVDA) AI data center buildout, not stepping away from semiconductors as a whole.
NVIDIA remains the demand engine underpinning the optical-networking story, and the next NVIDIA earnings report is widely watched as a sector catalyst. Any hesitation on AI capex expectations could land hardest on Coherent and Lumentum, the two premier NVIDIA optical partners.
Investors can watch for whether Lumentum’s report on Tuesday afternoon and Coherent’s on Wednesday afternoon reset the group’s tone, or simply extend today’s give-back. Options positioning is already leaning defensive, with Coherent’s full-chain put/call ratio at 1.19 and Lumentum’s at 1.54. Knowing all of this, traders may want to size their positions carefully into the upcoming earnings releases.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.
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