COHERENT's stock price surged 7.55% during intraday trading on Monday, marking a significant upward movement for the optical communications company.

The stock continues to benefit from multiple catalysts that emerged in recent sessions. NVIDIA CEO Jensen Huang and Coherent CEO Jim Anderson jointly attended the groundbreaking ceremony for the indium phosphide factory expansion in Sherman, Texas, which targets increased 6-inch indium phosphide wafer and optical interconnect capacity. The project will double production area and quadruple wafer output upon completion, with the company also securing a $50 million dedicated subsidy under the CHIPS Act.

NVIDIA previously invested $2 billion in Coherent and signed a long-term procurement agreement. Institutional forecasts project an 85% compound annual growth rate for indium phosphide demand driven by AI data centers. As the world's first manufacturer to achieve mass production of 6-inch indium phosphide wafers, the capacity expansion further solidifies Coherent's industry leadership position in the optical communications sector.