2 Optical Stocks to Buy After Tuesday's Selloff
Lumentum (LITE) and Coherent (COHR) shares fell 9.9% and 12.8% respectively on August 18, despite strong earnings reports. Lumentum's revenue doubled, with Q4 at $1.01B and FY at $3.01B, while Coherent reported record Q4 revenue of $2.05B and FY revenue of $7.12B. Both companies guided higher for future quarters, but investor concerns about AI demand led to the selloff.
How this was made
The 30-second read
Why it matters
Both companies posted robust results but were punished by market risk aversion.
Market read
Earnings and guidance for two major AI optics firms provide fresh trading catalysts amid sector‑wide volatility.
What to watch
One‑time GAAP net loss and high valuation multiples may limit upside despite growth.
Background
AI hype led to a broad sell‑off on Tuesday, with optics suppliers hit hardest.
Ticker impact
Lumentum reported FY Q4 revenue up 109% YoY and raised guidance, causing a 9.9% price drop.
Potential rebound if demand holds; watch for support around $800.
Guidance beats expectations, but market sentiment is negative after the sell‑off.
Coherent posted record Q4 revenue and margin expansion, guiding higher, leading to a 12.8% decline.
Possible upside if margin expansion continues; watch resistance near $300.
Earnings beat and guidance are positive, yet market risk remains high.
Market effects
Highlights supply constraints in AI data‑center optics, affecting the broader AI hardware sector.
U.S. tech and semiconductor markets may see increased volatility.
Signals potential bottlenecks for global AI infrastructure expansion.
Counterpoint
The sell‑off may be overdone; strong guidance could fuel a short‑cover rally.
Key entities
- CompanyLumentum Holdings Inc.
Optical components supplier for AI data centers.
- CompanyCoherent Inc.
Provider of lasers and optical transceivers.
