What Happened?
Shares of materials and photonics company Coherent (NYSE: COHR) fell 3.5% in the afternoon session after new export controls on critical minerals from China raised investor concerns about the stability of the company's global technology supply chain.
The move by China created worries about potential risks to Coherent's production continuity, as the company has significant exposure to Chinese supply chains. Adding to the negative sentiment, the Pomerantz Law Firm announced it was investigating claims on behalf of investors concerning whether the company had engaged in unlawful business practices. These headwinds appeared to overshadow positive news, as Rosenblatt analyst Mike Genovese maintained a 'Buy' rating on the stock and raised the price target from $135 to $150.
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What Is The Market Telling Us
Coherent’s shares are extremely volatile and have had 41 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 4 days ago when the stock dropped 6.8% as worries over worsening trade relations with China were triggered by critical comments from President Donald Trump. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions and ahead of an anticipated meeting between the US and Chinese presidents.
Consequently, technology stocks with significant exposure to Chinese supply chains, such as Nvidia and AMD, experienced sharp declines. This downturn was exacerbated by the bearish sentiment surrounding a prolonged U.S. government shutdown, adding to overall market uncertainty.
Coherent is up 11.3% since the beginning of the year, and at $112.39 per share, it is trading close to its 52-week high of $122.35 from October 2025. Investors who bought $1,000 worth of Coherent’s shares 5 years ago would now be looking at an investment worth $2,492.
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