New York, March 3, 2026, 12:20 (EST) — Regular session
Coherent Corp. (COHR) dropped 3.5% to $288.44 by midday Tuesday, retracing after Monday’s surge on the back of Nvidia’s $2 billion investment announcement. Shares have ranged from $271.95 to $290.20 during the session.
Shares of Coherent surged 15.4% Monday after Nvidia announced a multiyear optics agreement, propelling the company into the select group of suppliers crucial to upcoming AI data centers. On Tuesday, a wave of profit-taking followed as the stock slipped, investors factoring in the impact of a sizable equity offering. 1
The companies announced a nonexclusive deal that comes with a multibillion-dollar purchase commitment and “access and capacity rights” for advanced laser and optical networking gear—key hardware for moving massive amounts of data in AI clusters. Nvidia CEO Jensen Huang described the partnership as the two firms “pioneering next-generation silicon photonics,” referring to the use of light, not just electricity, for transferring data between chips. Coherent CEO Jim Anderson pointed to the move as building on a “20-year relationship” with Nvidia. 2
Coherent offloaded 7,788,161 shares to Nvidia in a private placement, bringing in $2 billion in cash at $256.80 a share, according to a regulatory filing. The company plans to use the money for research and development, expanding capacity, and supporting its U.S. manufacturing buildout. Coherent also detailed a collaboration deal granting Nvidia access to five more of its product lines related to co-packaged optics. 3
CPO—short for co-packaged optics—moves optical engines right next to the compute package, aiming to slash heat and power demand as bandwidth needs soar. Investors are waiting to see whether supplier “access” actually translates into repeat orders, not just splashy headlines.
The drop wasn’t limited to one name. Lumentum (LITE) sank 8.9%, with IPG Photonics (IPGP) down 1.3%. Nvidia (NVDA) also slipped, losing roughly 1.3%.
Brendan Burke, research director at Futurum, noted Nvidia’s double-down on optics suppliers points to photonics turning into a crucial supply-chain hurdle for AI hardware—more than just an upgrade. He pointed to tight capacity for indium phosphide lasers, which are essential for fast optical connections. 4
The risks? Hard to miss. Discounted share sales dilute current shareholders, and building out advanced optics factories isn’t quick or cheap. If data center spending cools or clients shift orders to competitors, there’s no promise demand will hold up.
Next up for Coherent: the company’s on the docket at Morgan Stanley’s 2026 Technology, Media & Telecom Conference later Tuesday, with a Technology Innovation Briefing coming March 17. Traders want specifics—production ramps, timing, and when exactly the Nvidia-fueled demand starts showing up in the top line. 5
