📉 Coherent: Strong results but uncertain outlook sends stocks down!
Coherent $COHR delivered very solid numbers for the fourth quarter, earnings per share came in at $1.00, beating estimates ($0.92), and sales were up year-over-year by 16 % to $1.53 billion, also above estimates. Still, the stock is down more than 23 %as the outlook for the first quarter fell short of expectations.

📊 What was behind the results?
Networking Solutions segment (optics for AI datacenters) grew 39% YoY

Revenues. USD 940 million (estimate: USD 940 million)

The remaining segments - materials and lasers - declined by 8%

In addition, Coherent announced the sale of its defense laser division for $400 million. USD 400million to help repay part of the debt (currently USD 3.7 billion). However, the move also lowers the revenue outlook, as the defence lasers were bringing in around USD 20mn. USD 20million each quarter.

🔌Important sector
The entire year 2025 has been marked by investments in AI infrastructure and Coherent is a direct beneficiary of this wave thanks to its optical networking technology.
This enables:
higher throughput than traditional copper cables

AI cloud scaling to extreme volumes

connection to new switches from Nvidiathat are 3.5x more energy efficient

If Nvidia pushes through with its optical switches, Coherent has a chance to become a key partner in the billion-dollar supply chains of new datacenters.

💬 Stock drop
The market today is pricing in future prospects rather than actual numbers. With a declining revenue outlook, the divestiture of part of the business, and declines in two of the three segments, the future doesn't look the way investors imagined.

Moreover, sentiment in the technology sector has been extremely reactive this year and even a minor deviation from expectations leads to a sharp correction.

What is your opinion on Coherent?