Investors will exercise greater caution with the downstream AI suppliers. On Tuesday, three companies saw their stock fall by 9.87% or more.
Lumentum (LITE) fell by nearly 10% after sentiment for AI suppliers worsened. Hurt by semiconductor stocks like Micron (MU), Intel (INTC), AMD (AMD), and Marvell (MRVL), Lumentum also fell. Investors took profits in networking-related firms despite their strong quarterly results.
In Q4/2026, Lumentum benefited from its 400-milliwatt design efficiency. When the products enter the market in late 2027-28, it may benefit from optical scale-up, increasing its sales in the laser market.
CoreWeave (CRWV) fell by 12%. Earlier this week, BofA Securities said that Nebius (NBIS) and CoreWeave benefited from increasingly favorable pricing dynamics. Demand is outstripping GPU supply. The two firms will benefit from incremental customer spending and demand for next-generation GPUs.
Coherent (COHR) fell by 12.75% on Tuesday. Rising oil prices, led by a lack of a peace plan between the U.S. and Iran, hurt market sentiment. Additionally, long-term bond yields (TLT) are at 5.3%. This is a rate last seen in 2007. Higher debt yields compete with stocks for investment. When debt offers better returns at lower risk, it pressures stocks like Coherent.
Watch out for Coherent’s peers like Celestica (CLS), Credo Technology (CRDO), and IPG Photonics (IPGP) facing similar selling pressures.
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