Coherent Corp. shares fell 5% in pre-market trading on Thursday, extending a sharp reversal that began in the after-hours session following the release of fiscal fourth-quarter results. The decline came despite the company reporting earnings and revenue that exceeded Wall Street expectations, along with a stronger-than-expected outlook for the current quarter.

The optical-networking company posted adjusted earnings of $1.74 per share on revenue of $2.05 billion, both surpassing consensus estimates. Strong demand in the datacenter and communications segment drove the 34% year-over-year revenue increase. For the first quarter of fiscal 2027, Coherent guided for revenue of $2.2 billion to $2.4 billion and adjusted EPS of $1.85 to $2.05, also above analyst forecasts at the time of the report.

Despite the upbeat results, the stock faced heavy selling pressure as investors locked in profits following a significant run-up. Coherent shares had surged 8.2% during the regular session prior to the release and had gained more than 200% over the past 12 months, leaving elevated valuation multiples that raised the bar for upside surprises. The "sell-the-news" reaction reflected the market's increasingly high expectations for AI optics suppliers, particularly after strong results from rival Lumentum Holdings the previous day.