Nvidia Invests $2 Billion in Coherent to Enhance AI Networking
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 02 2026
0mins
Source: Newsfilter
Coherent Corp. shares fell 7.74% as the stock hit a 5-day low amid a broader market decline, with the Nasdaq-100 down 1.30% and the S&P 500 down 0.14%.
The decline in Coherent's stock comes despite Nvidia's announcement of a $2 billion investment aimed at enhancing optical interconnects and silicon photonics, which are crucial for efficient data transmission in AI infrastructure. This strategic move is expected to solidify Nvidia's market position and could positively impact Coherent in the long term, although immediate market conditions are challenging.
Investors are closely monitoring the developments in AI networking technologies, as the demand for efficient data transmission continues to grow. Coherent's involvement in this sector may provide future growth opportunities, but current market sentiment remains cautious.
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Analyst Views on COHR
Wall Street analysts forecast COHR stock price to fall
13 Analyst Rating
9 Buy
4 Hold
0 Sell
Moderate Buy
Current: 335.700
Low
170.00
Averages
238.18
High
300.00
Current: 335.700
Low
170.00
Averages
238.18
High
300.00
About COHR
Coherent Corp. is a vertically integrated manufacturing company that develops, manufactures, and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in the communications, industrial, instrumentation and electronics markets. Its segments include datacenter & communications, and industrial. Its datacenter & communications segment offers optical transceivers, optical circuit switches, interconnect cables, optical instruments, optoelectronic devices, communication components, and wavelength management products. Its industrial segment offers lasers, machines & systems, components & accessories, optics, laser measurement instruments, ceramics & metal matrix, ion implantation, engineered materials, and wide-bandgap electronics. Its subsidiaries include Finisar Australia Pty Limited, Nufibre PTY LTD, Finisar Brasil Suporte De Vendas LTDA, Coherent Aerospace & Defense, Inc., and Coherent Asia, Inc.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Key Supply Agreement: AXT's subsidiary, AXT-Tongmei, will develop and supply 6-inch indium phosphide water substrates to Coherent, which has made a prepayment of approximately $22.29 million, securing future material procurement and strengthening their partnership.
- Capacity Expansion Plans: AXT plans to expand production capacity at its Beijing facility between 2026 and 2028 to meet Coherent's demands, a move that not only enhances the company's production capabilities but also prepares for future market demand growth.
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- Rapid Growth of Lumentum: Lumentum's total revenue nearly doubled in Q1 2023 to $808.4 million, with its components and systems segments growing by 77% and 121% respectively, showcasing strong performance in the photonics market, though it faces intense competition from Coherent.
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See More
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See More
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- Prepayment Arrangement: Coherent will make a prepayment of approximately $22.29 million for future water substrate purchases, providing AXT with liquidity while ensuring Coherent's procurement commitment during the agreement period.
- Termination Clauses: The agreement stipulates that if Coherent fails to meet minimum order requirements, the prepayment becomes non-refundable, allowing AXT to terminate the agreement; conversely, if AXT fails to meet capacity commitments for over six months, Coherent can terminate the agreement and receive a refund for any unused prepayment.
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