COHERENT's stock plummeted 9.85% during intraday trading on Tuesday, reflecting heightened volatility and significant selling pressure in the optical communication sector.

The sharp decline is primarily attributed to a bearish CPO (Co-Packaged Optics) research report published by SemiAnalysis, which argues that large-scale commercial deployment of co-packaged optics faces significant delays until 2028-2029. The report cites core bottlenecks including low optical engine yield rates, high co-packaging integration difficulty, and unfavorable system-level cost economics, intensifying bull-bear divergence across the sector.

This research has triggered sector-wide selling pressure, dragging down peers including Corning and Vishay Intertechnology, despite recent positive developments for COHERENT such as its Texas indium phosphide factory expansion and CHIPS Act subsidy confirmation.