Applied Optoelectronics Tumbles 9%, Coherent Sinks 8%, Lumentum Falls 4% as Optics Stocks Cool Off

Shares of Applied Optoelectronics, Coherent, and Lumentum dropped sharply midday, with Applied Optoelectronics down about 9%, Coherent down about 8%, and Lumentum down about 4%. The declines did not erase large year-to-date gains, with Applied Optoelectronics up 341%, Coherent up 87%, and Lumentum up 125%. No company-specific negative news was reported. The selloff was attributed to profit-taking and sector rotation after an aggressive AI infrastructure rally. Dell’s strong AI server earnings were cited as a catalyst for earlier gains in the optics complex. Fundamentals remained supportive, including Applied Optoelectronics’ revenue guidance and sequential ramp, Coherent’s datacenter and communications growth, and Lumentum’s optical circuit switching backlog and CPO order deliverability. ServiceNow rose strongly, suggesting capital rotated toward enterprise software.

"Where is the money going today? ServiceNow ( NYSE:NOW) stock is ripping higher, up 14% intraday, joining a broader enterprise software bid. With NOW shares down 29% YTD heading into today, the setup looks like the mirror image of the optics complex. That rotation dynamic helps exp"

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