Coherent (COHR) Is Down 21.6% After Returning To Profitability And Sampling 300mm SiC Substrates

• In August 2026, Coherent Corp. reported a return to profitability with fourth‑quarter sales of US$2,045.5 million and full‑year sales of US$7.12 billion, while also starting customer sampling of its 300mm high thermal conductivity silicon carbide substrates for AI and high‑performance computing chips.
• This move into 300mm silicon carbide heat‑spreading substrates highlights how thermal management is becoming a core bottleneck and materials opportunity in advanced AI datacenters.
• We’ll explore how Coherent’s move into 300mm silicon carbide substrates for AI chips could reshape its existing investment narrative and risks.

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Coherent Investment Narrative Recap

To own Coherent, you generally need to believe it can remain a key materials and photonics supplier to AI data centers, even as competition and capital needs stay intense. The return to profitability and the start of sampling 300mm silicon carbide substrates add a fresh near term catalyst around AI thermal management, but they do not remove the larger risks from customer concentration, heavy investment requirements, and exposure to cyclical industrial and silicon carbide demand.

The most relevant recent announcement here is Coherent’s August 2026 earnings release, showing US$2,045.5 million in fourth quarter sales and US$7,118.2 million for the full year. This profitability shift gives the company more financial flexibility to support capital intensive platforms like 300mm silicon carbide and its indium phosphide build out, which are central to the AI data center catalyst, but also heighten the risk if future returns on these investments fall short.

Yet investors should also be aware that if customer concentration bites at the same time as Coherent ramps capex and new AI materials platforms, ...

Read the full narrative on Coherent (it's free!)

Coherent's narrative projects $15.3 billion revenue and $2.7 billion earnings by 2029. This requires 32.3% yearly revenue growth and about a $2.3 billion earnings increase from $400.6 million today.

Uncover how Coherent's forecasts yield a $394.62 fair value, a 43% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were already assuming Coherent could reach about US$15.9 billion in revenue and US$2.9 billion in earnings by 2029, which is a far more upbeat view than the baseline narrative. Compared with the execution risk in rapidly scaling indium phosphide and advanced thermal materials, this bullish stance shows how widely opinions can differ, and how the latest 300mm silicon carbide news could eventually push these expectations higher or lower.

Explore 5 other fair value estimates on Coherent - why the stock might be worth as much as 91% more than the current price!

Reach Your Own Conclusion

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your Coherent research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Coherent research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Coherent's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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