EL7.AI
StocksMedium•31 March 2026•
1 min read

Coherent Shares Surge on Record Datacenter Demand and Margin Expansion Outlook

Key Facts

1Coherent's datacenter book-to-bill ratio has surged above 4x.
2Most of 2026 is already booked, with order visibility extending into 2028.
3The ramp-up of six-inch indium phosphide (InP) production is expected to quadruple chip output at less than half the cost.
4The datacenter and communications segment now accounts for over 70% of the company's total revenue.

Coherent (COHR) is experiencing an unprecedented surge in demand for its optical components, driven by the rapid expansion of AI infrastructure. The company's datacenter book-to-bill ratio has climbed above 4x, indicating a significant backlog of future orders. Management noted that most production capacity for 2026 is already reserved, with order visibility extending as far as 2028. A strategic shift to 6-inch Indium Phosphide (InP) production is expected to quadruple chip output while cutting manufacturing costs by more than half. This technological advancement is poised to significantly expand profit margins as the datacenter and communications segment now represents over 70% of total revenue. The growth is primarily fueled by the global transition to high-speed 800G and 1.6T networking solutions.

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