What Happened?
A number of stocks fell in the afternoon session after investors rotated out of AI-linked high-flyers following underwhelming earnings updates from Oracle and Broadcom as the core thesis shifted from "growth at any cost" to "prove the returns."
Oracle triggered the alarm by missing revenue estimates while simultaneously hiking capital expenditures by $15 billion. This reignited fears that AI infrastructure spending is outpacing actual monetization. Broadcom compounded the anxiety; despite beating earnings, its stock fell as CFO Kirsten Spears cautioned that gross margins may come under pressure as product mix shifts further toward system-level AI sales. This sparked a macro rotation away from AI infrastructure and power plays.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Electronic Components & Manufacturing company Coherent (NYSE:COHR) fell 9.3%. Is now the time to buy Coherent? Access our full analysis report here, it’s free for active Edge members.
- Electronic Components & Manufacturing company Plexus (NASDAQ:PLXS) fell 3.6%. Is now the time to buy Plexus? Access our full analysis report here, it’s free for active Edge members.
- Electronic Components & Manufacturing company TTM Technologies (NASDAQ:TTMI) fell 7.3%. Is now the time to buy TTM Technologies? Access our full analysis report here, it’s free for active Edge members.
- Terrestrial Telecommunication Services company Cogent (NASDAQ:CCOI) fell 4.2%. Is now the time to buy Cogent? Access our full analysis report here, it’s free for active Edge members.
- Electronic Components & Manufacturing company Amphenol (NYSE:APH) fell 6.6%. Is now the time to buy Amphenol? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Coherent (COHR)
Coherent’s shares are extremely volatile and have had 46 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 1 day ago when the stock dropped on the news that major investor Bain Capital offered to sell another significant block of the company's shares at a potential discount.
According to reports, Goldman Sachs offered 5 million of Bain Capital's shares in a price range that represented a potential discount of up to 3.4% from the previous day's closing price. The offering, valued at up to $987.3 million, marked the third time in just over a month that the private equity firm moved to reduce its holdings in the laser equipment maker. Such a large sale, particularly at a reduced price, often puts downward pressure on a stock's price as it increases the supply of shares available on the market and can signal a decreased confidence from a major shareholder.
Coherent is up 77% since the beginning of the year, but at $178.01 per share, it is still trading 10.3% below its 52-week high of $198.50 from December 2025. Investors who bought $1,000 worth of Coherent’s shares 5 years ago would now be looking at an investment worth $2,487.
While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report.