Coherent Advances 16%, Lumentum Climbs 13%, Applied Optoelectronics Adds 8% as Optics Rally Broadens

Three major optics stocks rallied midday Tuesday, reversing their recent underperformance. Coherent’s stock jumped 16% to $422, its highest level since Monday’s close, after a 4% weekly decline. The company reported fiscal Q3 2026 revenue of $1.805 billion, a 21% year-over-year increase, with its Datacenter and Communications segment growing 41% to $1.361 billion. CEO Jim Anderson attributed the growth to strong demand in datacenter and communications, while NVIDIA’s $2 billion investment in laser and optical networking remains a key tailwind. Lumentum’s stock climbed 13% to $1,024, surpassing the $1,000 psychological level. The company’s fiscal Q2 2026 revenue rose 66% year-over-year to $665.5 million, with guidance for Q3 2026 revenue between $780 million and $830 million, representing over 85% growth. CEO Michael Hurlston emphasized Lumentum’s role as ‘mission-critical’ for AI leaders, while analysts set an average price target of $1,105. Applied Optoelectronics, the smallest-cap of the trio, rose 8% to $201, extending its 433% year-to-date gain. The company’s Q1 2026 revenue increased 51% year-over-year to $151.14 million, driven by datacenter demand for 800G transceivers. CEO Thompson Lin guided Q2 2026 revenue to $180 million to $198 million and noted further growth expected in Q3 as capacity expands. The broader rally reflects AI-driven demand for high-speed optical transceivers, including 400G, 800G, and 1.6T models. However, the stocks remain volatile, with Coherent up 449% over the past year, Lumentum up 1,255%, and Applied Optoelectronics up 1,219%. Investors are advised to monitor hyperscaler capex trends and transceiver adoption updates, as these factors will continue to shape sector performance.