Coherent (NYSE:COHR) shares climbed 5.7% in premarket trading to $347.37 after rival Lumentum Holdings (NASDAQ:LITE) delivered fiscal fourth-quarter revenue and adjusted earnings above Wall Street forecasts and issued stronger-than-expected first-quarter sales guidance, reinforcing expectations of robust demand for optical networking equipment.
The positive read-through from Lumentum encouraged investors ahead of Coherent’s own fiscal 2026 fourth-quarter results, which are due after the NYSE close. Management is scheduled to hold a webcast at 10:30 p.m. ET following the release.
Wall Street expects strong fourth-quarter growth
Expectations are elevated heading into Coherent’s quarterly announcement, with analysts forecasting growth in both revenue and earnings.
Wall Street estimates point to fourth-quarter revenue of approximately $1.98 billion and non-GAAP earnings per share of $1.43, representing an increase of roughly 93% year on year.
Wednesday’s premarket advance also represents a partial recovery from the stock’s recent sell-off. Coherent shares dropped 14.2% on August 10 to trade at $325.15, leaving them well below their 52-week high of $440.
Raymond James lifts Coherent price target
Analyst sentiment has provided another source of support. Raymond James increased its price target on Coherent to $435 from $371 while maintaining its Strong Buy rating.
Regulatory developments have also strengthened the investment case. A Federal Communications Commission proposal to prohibit imports of Chinese optical transceivers could provide a significant advantage to domestic manufacturers, with Coherent positioned as a potential major beneficiary.
The company’s broad photonics portfolio and global manufacturing operations provide exposure to expanding demand for AI infrastructure. Coherent is also benefiting from initiatives designed to strengthen its domestic production capabilities, including support from Nvidia’s $2 billion investment aimed at expanding the company’s U.S. manufacturing capacity.
These factors could position Coherent to participate in what management views as a multi-year growth cycle driven by artificial intelligence.
CPI and Federal Reserve expectations remain in focus
The broader market provided a supportive backdrop, with the Nasdaq gaining 0.5% in premarket trading and the S&P 500 also moving modestly higher as investors showed continued appetite for risk.
Markets were also focused on the latest Consumer Price Index report, one of the week’s most closely watched economic releases. The inflation figures could influence expectations for the Federal Reserve’s September policy meeting at a time when investors remain divided over the prospect of another change in interest rates.
The data could consequently play an important role in determining the next moves in U.S. Treasury yields, the dollar and equity markets.
Nvidia strategy and competitive capacity remain key factors
Investors are also monitoring developments across the optical networking industry, including potential manufacturing capacity announcements from competitors such as Lumentum and any changes to NVIDIA’s supply strategy.
Coherent’s premarket rally therefore reflects several overlapping catalysts, including optimism following Lumentum’s results, anticipation surrounding its own quarterly earnings, a rebound following the recent sharp decline, potential regulatory support from the FCC proposal and positive analyst sentiment.
Attention will now turn to Coherent’s fiscal fourth-quarter report and its strategic relationship with NVIDIA, with the results after the closing bell likely to determine whether the latest share-price recovery can maintain its momentum.
Coherent stock price
Lumentum stock price
