Coherent shares surged 13.43% in pre-market trading on Tuesday, emerging as a standout gainer after Reuters reported that the Trump administration is drafting a ban on U.S. imports of new Chinese data center components.

The proposed restrictions target optical transceivers, which are critical for high-speed data transmission inside data centers. The move is intended to protect the infrastructure supporting the AI boom from potential security risks. According to the report, a ban on Chinese models could force American cloud firms to transition to alternative suppliers, with U.S.-based Coherent and Lumentum identified as key beneficiaries.

The broader optical communication sector also rallied sharply, with peers Applied Optoelectronics and Lumentum jumping over 13% and 9% respectively, as investors bet on a potential market-share shift away from Chinese competitors like Zhongji Innolight, which currently holds a leading 27% share of the global data center transceiver market.