Coherent Jumps 13% as Optical Stocks Extend AI Rebound; Lumentum Surges 11%, Applied Optoelectronics Rises 4%

Optical stocks are adding a second leg to their AI rebound, and one photonics leader is out in front. Coherent (NYSE:COHR | COHR Price Prediction) stock trades at $217.80, up 13% in early action. The photonics and laser maker is rising with a broad group of AI infrastructure names that are recovering from last week’s selloff.

Major indexes are higher as investors return to AI shares and oil slides. Last week’s sharp tech selloff came on fears that Democrats’ midterm wins will bring tighter data center rules. Coherent and its optical peers are all rising. But the gains vary widely, and the differences line up with each company’s latest results and outlook.

Coherent’s Results and Analyst Split Frame Its Rebound

Coherent disclosed on November 4 that its fiscal Q1 2027 revenue rose 50% year over year to $2.37 billion. For Q2, Coherent guided its revenue to a range of $2.55 billion to $2.75 billion. Management tied the company’s growth to AI data centers shifting from copper to optical connectivity.

J.P. Morgan maintained its $385 price target on Coherent on November 5. BofA cut its Coherent target to $240 from $400 after the report, so analysts are split.

Cash is the main worry analysts flag on Coherent. In the September quarter, Coherent posted negative operating cash flow of $92.7 million against capital expenditures of $775.5 million.

Why Lumentum and Applied Optoelectronics Are Moving by Different Amounts

Checking in on the peers, Lumentum (NASDAQ:LITE) stock is at $596.36, up 11%. Under an all-stock deal expected to close in the first half of 2028, Marvell Technology (NASDAQ:MRVL) agreed to buy Lumentum. As a result, Lumentum shares largely move with the acquirer’s share price. Marvell stock is at $153.40, up 9%, so Lumentum is running slightly ahead of its buyer.

Applied Optoelectronics (NASDAQ:AAOI) stock is at $52.03, up 4%, lagging the group but still trending higher. On November 5, Applied Optoelectronics reported record Q3 2026 revenue of $269.9 million. Management guided Q4 2026 revenue below consensus. Applied Optoelectronics set the range at $385 million to $420 million, as a shortage of digital signal processor chips limited shipments of its next-generation 1.6-terabit transceivers.

Delays in getting power at the company’s Texas plant led Applied Optoelectronics to lower its end-2026 capacity goal to over 500,000 units a month from 650,000. Raymond James trimmed its Applied Optoelectronics target to $165 from $178 while keeping an Outperform rating. B. Riley went much further, cutting its target to $45 from $92. The modest gain suggests the market is still considering Applied Optoelectronics’ supply and power constraints.

Ciena (NYSE:CIEN) stock is at $264.82, up 9%. Meanwhile, Fabrinet stock is at $354.69, up 8%. Strength in a networking-systems maker and a contract manufacturer alongside Coherent and the component makers points to a sector-wide move.

How Coherent’s Business Model Differs From Lumentum and Applied Optoelectronics

Coherent is vertically integrated. It spans materials and crystal growth through optics and lasers, and it still runs an industrial segment serving semiconductor equipment, AI server circuit-board drilling and fusion. Lumentum focuses on high-speed transceivers, optical components and optical circuit switching, and its future lies inside Marvell’s chip portfolio once the deal closes. Applied Optoelectronics is a much smaller transceiver maker that also leans on a cable TV broadband business and a short list of large customers.

Chief executive Jim Anderson sees the pending Marvell combination as an opening for Coherent. Anderson spoke on the November 4 call. He stated, “I think for a lot of our customers, I think it’s really important that they have an independent photonic optical supplier and partner.”

What Comes Next for Coherent’s Optical Rebound

Coherent now faces the question of whether its heavy spending turns into positive cash flow while the company delivers on its Q2 guidance. Multi-year customer agreements, expanding margins and management’s comment that calendar 2027 is basically booked out give bulls reason for optimism. The bears can point to the cash drain, rising debt and BofA’s lower target.

Supply of next-generation parts remains the open question for Applied Optoelectronics, and management expects the shortage to improve in the first quarter of 2027. Fresh policy headlines on data center rules could resume last week’s selloff across Coherent and the rest of the optical group. A cautious investment approach could make sense while the debate over Coherent’s cash burn plays out.

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