Shares of Coherent Corp rose approximately 1.5 percent in Tuesday trading, closing at $338.47 after a previous close of $333.36. The gain followed the company's announcement of a three-year supply agreement with AXT Inc. for 6-inch compound semiconductor wafer substrates. The materials will be sourced through AXT-Tongmei, a subsidiary of AXT Inc.
The agreement provides Coherent with a multi-year supply of substrates to support its transition toward larger wafer formats. Company management has stated that moving to larger formats can improve device yield and reduce relative costs compared to smaller formats, which supports targets for gross margin expansion. The deal offers sustained visibility for the company's optical component manufacturing operations.
Coherent is a global technology firm that produces engineered materials, optoelectronic components, and laser systems for networking, industrial, communications, and instrumentation markets. The company was formed through the acquisition of a prior optics business and has reported record annual revenue in its most recent fiscal year.
During Tuesday's session, Coherent stock traded between $310.00 and $352.20. The company holds a market capitalization of approximately $53.67 billion. Its price-to-earnings ratio stands at 69.64, with earnings per share of $4.86. Over the past 52 weeks, shares have ranged from $84.35 to $440.00.
The stock rebounded from a decline the prior week linked to a broader selloff in artificial intelligence infrastructure stocks. Some analysts noted that Coherent trades at a premium to peers on a price-to-sales basis but suggested there is room for upside due to demand for optical components driven by artificial intelligence. Investors will monitor the company's upcoming fiscal fourth-quarter earnings report for details on margin progress related to the wafer transition strategy.
