Coherent stock falls 7.5% despite $50M AI datacenter funding

What happened

Coherent signed a letter of intent for up to $50 million（約80億円） in government-backed funding to expand a manufacturing facility that produces optical networking gear for AI datacenters, in partnership with NVIDIA. On the day of the announcement, the stock declined 7.5%, while the broader S&P 500 slipped 0.6% and peer LITE fell 8.6%.

Why it matters

The stock has already delivered massive returns over the past year, rising from a low of $79.77 to a high of $426.89. When a stock has run this far, even solid news can disappoint investors if it does not exceed expectations. For a company with a market cap north of $72.8 billion（約12兆円）, a $50 million（約80億円） government grant may have felt incremental rather than transformative.

What to watch

Coherent's recent fundamentals show revenue growth accelerating to 18.0% and net margin hitting a three-year peak of 7.1%. The sell-off raises the question of whether the largest gains in the AI trade for this stock have already been realized.