Coherent Surges 13% as Investors Revisit $20 Billion AI Deal After Sell-Off; Lumentum Climbs 4%, Applied Optoelectronics Gains 3%

Applied Optoelectronics (AAOI) reported Q3 revenue of $269.9M, up 128% YoY, with AI demand driving growth. CFO Stefan Murry stated demand will outpace capacity through 2027. The company signed a multi-year deal with a hyperscaler customer, expecting $1B-$1.5B in revenue. Q4 guidance of $385M-$420M trails consensus. Analysts cut price targets post-earnings. Stock fell 20.89% pre-earnings, then rose 6.87% post-earnings.

Marvell Technology (MRVL) fell 28.1% this week after announcing a $115 billion all-stock deal to acquire Lumentum (LITE). The acquisition, valued at a significant premium, raised dilution concerns, leading to downgrades from analysts. Marvell's stock is down 57.2% from its 52-week high, and the deal faces regulatory hurdles and potential channel conflicts.

Marvell (MRVL) and Western Digital (WDC) each fell 28% in the week ended November 6, 2026, their worst weekly performance since 2001. Both companies had raised guidance in their latest earnings reports. The selloff was driven by election results and broader market reactions to AI data center policies. Marvell also faced deal risk due to its acquisition of Lumentum (LITE). Western Digital appears more resilient post-selloff, with a simpler business and a deeper discount to its record high.

Coherent (COHR) stock fell 8% last week, closing at $193. J.P. Morgan reiterated a $385 price target, implying 100% upside. Marvell (MRVL) agreed to acquire Lumentum (LITE) for $115B, potentially increasing competition. Coherent's Q1 revenue grew 50% YoY to $2.37B, but negative operating cash flow is a concern.

Applied Optoelectronics (AAOI) reported Q3 2026 record revenue of $269.9M, up 127.5% YoY, and returned to GAAP profitability with $6.3M net income. The company signed a $1B-$1.5B LTA for 1.6T transceivers, but faces supply chain constraints and delayed capacity expansion. Q4 revenue may fall short due to customer demand shifts. AAOI plans to increase manufacturing capacity to 1M units/month by late 2027.

Applied Optoelectronics (AAOI) reported Q3 earnings, showing record revenue and profitability, but missed capacity ramp targets due to delays. The company plans to increase transceiver output significantly by 2027, though bears caution about potential underutilization. Management reduced year-end capacity goals. AAOI stock rebounded on the earnings report.