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Why Is Coherent (COHR) Stock Soaring Today

ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

COHR Cover Image

What Happened?

Shares of materials and photonics company Coherent (NYSE: COHR) jumped 5.9% in the afternoon session after the company announced a new multiyear strategic supply agreement with Apple, expanding their long-standing partnership. The photonics company expanded its long-standing partnership to supply vertical-cavity surface-emitting lasers, or VCSELs, which powered key features like Face ID. The components were manufactured at Coherent's facility in Sherman, Texas, as part of Apple's commitment to American manufacturing. The news added to recent positive sentiment, as one analyst recently increased the stock's price target to $97, and other reports highlighted the company's favorable growth outlook.

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What Is The Market Telling Us

Coherent’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock dropped 3.3% on the news that a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy. The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve.

Coherent is up 13% since the beginning of the year, and at $113.63 per share, has set a new 52-week high. Investors who bought $1,000 worth of Coherent’s shares 5 years ago would now be looking at an investment worth $2,193.

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