On September 4, Coherent rose 3.91% in regular trading, trading at $274.16/share, with turnover of $181 million. The rebound was driven by Deutsche Bank initiating coverage on the AI hardware sector, naming Coherent and Lumentum as top picks with a Buy rating.

Deutsche Bank highlighted that optical networking hardware suppliers stand to be the biggest beneficiaries of the AI era, injecting fresh confidence into the optical communications sector after consecutive sessions of weakness. Coherent had previously declined over multiple trading days, weighed down by peer Credo Technology plunging over 20% on disappointing optical product revenue forecasts and margin guidance, which triggered broad-based selling across the sector. Storage and optical communications stocks rose in tandem on the session, with SanDisk up 5%, Seagate up 4%, and AXT up 3%.

Coherent reported results in mid-August that beat expectations across the board. The broader expansion of AI computing infrastructure continues to drive strong demand in segments such as co-packaged optics, with institutions broadly optimistic about the continuation of a high-growth cycle in optical communications.

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