Lumentum and Coherent, optical component makers for AI data centers, saw shares drop sharply on Tuesday. Lumentum fell 9.9% to $873.31, while Coherent declined 12.8% to $306.43 amid broader selling in richly valued AI-related stocks. The declines weren't company-specific. Both firms recently reported strong results. Lumentum doubled its revenue to $1.01 billion in its fiscal fourth quarter ended 27 June, up 109% year over year. The company expects $1.225 billion to $1.275 billion in revenue this quarter. Adjusted gross margin reached 50.4%, with adjusted earnings per share of $3.23. Management guided to $4.05 to $4.35 this quarter. Coherent posted a record quarter with guidance for continued growth. Both companies cited strong demand for optical components used in AI data centers.

Coherent begins sampling 300mm silicon carbide substrates for AI chips. Coherent launched customer sampling of 300mm high thermal conductivity silicon carbide substrates for leading AI semiconductor partners, advancing its materials platform for HPC infrastructure. Coherent COHR-45.37(-12.92%) has begun customer sampling of 300mm high thermal conductivity silicon carbide (SiC) substrates for leading AI semiconductor partners, the company disclosed on August 17, 2026 via GlobeNewsWire. The substrates are designed to advance Coherent's materials platform for AI and high-performance computing (HPC) infrastructure applications. The announcement comes five days after Coherent posted Q4 FY2026 earnings that beat estimates, with data center revenue climbing 66% year over year. Read more market news on the Market News hub. What happened. Coherent launched customer sampling of its 300mm high thermal conductivity SiC substrates, targeting leading AI semiconductor companies. The 300mm wafer size aligns with advanced semiconductor manufacturing node requirements, where larger substrates improve economies of scale for chip production. On the August 12 Q4 FY2026 earnings call, CEO Jim Anderson had already previewed Coherent's move into advanced materials. He cited "advanced materials for data center thermal and power management" as one of several new revenue streams expected to ramp over the coming quarters. Anderson separately noted that Coherent's thermodynamic cooling materials could "improve thermal performance and enable higher XPU performance," with initial revenue anticipated in the second half of calendar 2027. The SiC substrate announcement reinforces that framing. Silicon carbide's high thermal conductivity makes it suitable for managing heat in AI accelerators and dense HPC deployments, where power density is a key constraint. COHR shares fell 5.48% on August 18 to $317.29, with a market cap of $62.07 billion. The stock has gained approximately 480% over the past 24 months as AI networking demand surged. Why it matters. Coherent is best known as a photonic components supplier for AI data center networks, but the SiC substrates initiative signals a deliberate push into materials science beyond optics. The announcement positions Coherent as a substrate provider to semiconductor fabricators rather than purely a component supplier. On the Q4 call, Anderson emphasized that Coherent's competitive differentiation rests on vertical integration and manufacturing scale. Extending that integration into substrates could deepen customer lock-in with AI chipmakers and open a new revenue line within the same customer base. CFO Sherri Luther flagged new product ramps across 1.6T transceivers, optical circuit switching, co-packaged optics, multi-rail systems, and thermal management solutions as drivers for FY2027 margin expansion. For researchers tracking Coherent's diversification beyond photonics, the SiC substrate sampling is an early signal that the materials platform is progressing toward commercial qualification. What to watch next. Monitor three concrete follow-ups tied to this announcement: * Customer qualification timeline: The sampling phase precedes volume qualification. Watch for any update in Coherent's Q1 FY2027 earnings call (scheduled around November 4, 2026) on whether any AI semiconductor partners have moved toward purchase agreements. * Revenue ramp guidance: Anderson pegged the thermal management revenue ramp to the second half of calendar 2027. Any revision to that timeline, either acceleration or delay, would be material for FY2027 consensus estimates. * SIc substrate capacity disclosure: Coherent has not disclosed specific production capacity for its SiC substrate platform. The next investor presentation or 10-K filing (due in August 2026) may contain updated details on wafer fabrication capabilities. Coherent guides Q1 FY2027 revenue of $2.2 billion to $2.4 billion with EPS of $1.85 to $2.05. The company expects to reach its first $3 billion quarterly revenue milestone by the end of fiscal 2027.