"Shares of Applied Optoelectronics ( NASDAQ:AAOI) are down 14% in midday trading, while Coherent ( NYSE:COHR | COHR Price Prediction) is off 10% and Lumentum ( NASDAQ:LITE) is sliding 7%. The selloff is sector-wide. Ciena ( NYSE:CIEN) is lower by 10% and Fabrinet ( NYSE:FN) is down 8%, confirming this is correlated basket selling rather than a single-name issue. Volume on AAOI exploded out of the gate, with 756,465 shares changing hands in the opening 15 minutes."
"Coherent reported fiscal Q3 2026 results with non-GAAP EPS of $1.41 versus $1.3943 consensus and revenue of $1.81 billion, beating by just 1% on the bottom line. That's the company's smallest beat in four quarters. Coherent's Datacenter and Communications revenue still surged 41% year over year (YoY) to $1.36 billion, now 75% of total revenue. CEO Jim Anderson cited "exceptionally strong demand across our datacenter and communications businesses.""
"Still, Applied Optoelectronics is derisking ahead of its own earnings tonight. The company reports after the market close on May 7, with management guiding Q1 2026 revenue to $150 million to $165 million. When a stock is up triple digits in four months, even modest profit-taking ahead of a print can snowball. Heading into today, AAOI stock was up 412% year to date (YTD), Lumentum was up 156%, and Coherent was up 87%."
"These names share AI data center exposure, hyperscaler customer concentration, and overlapping product roadmaps in 400G/800G/1.6T transceivers and co-packaged optics. Lumentum's last quarter underscored the demand backdrop, with revenue up sharply year over year and a sizable optical circuit"
Applied Optoelectronics, Coherent, and Lumentum declined sharply during midday trading as the selloff spread across the AI optics sector. Ciena and Fabrinet also dropped, indicating correlated basket selling rather than a single company issue. Trading volume surged for Applied Optoelectronics early in the session. The move followed a strong prior rally, with shares up substantially year to date. Coherent reported fiscal Q3 2026 results with a small non-GAAP EPS beat and a slight revenue beat, while datacenter and communications revenue rose 41% year over year. Applied Optoelectronics reduced risk ahead of its upcoming earnings, with guidance for Q1 2026 revenue set between $150 million and $165 million. These companies share AI datacenter exposure, hyperscaler customer concentration, and overlapping product roadmaps in advanced transceivers and co-packaged optics.
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