What Happened?
Shares of materials and photonics company Coherent (NYSE: COHR) jumped 10.8% in the afternoon session after the company announced the launch of its Sapphire XT, a new compact and powerful visible laser platform. Based on its proven Optically Pumped Semiconductor (OPS) technology, the new product doubled the performance of prior models while cutting its size by more than 50%. The Sapphire XT was released as a one-box system with an integrated controller and a footprint comparable to a smartphone. The product launch occurred against a backdrop of solid business performance for the company, as its Data Center sales had also grown 23% year-over-year.
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What Is The Market Telling Us
Coherent’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. But moves this big are rare even for Coherent and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 28 days ago when the stock gained 3.8% on the news that Morgan Stanley raised its price target on the stock to $180 from $150. The analyst's move signaled increased confidence in the company's prospects. This positive sentiment was supported by Coherent's previous financial results, which showed strong performance. The company had reported revenue of $1.58 billion, with pro forma revenue growth reaching 19% year over year. This growth was mainly driven by high demand from AI-related data centers and communications infrastructure. The broader market environment for business services also appeared favorable, as companies increasingly viewed these services as essential for growth and efficiency.
Coherent is up 3.2% since the beginning of the year, and at $200.62 per share, has set a new 52-week high. Investors who bought $1,000 worth of Coherent’s shares 5 years ago would now be looking at an investment worth $2,273.
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