Coherent Corp. (COHR) surged 5.17% in pre-market trading on Wednesday, as investors cheered the company’s fiscal fourth-quarter earnings report that exceeded market expectations. The rally marks a sharp recovery from a more than 9% decline in the two sessions prior to the earnings release.

The company reported after Tuesday’s close, with its data center and communications segment delivering 41% year-over-year revenue growth and 49% profit growth, driven by sustained AI computing demand. Market consensus had projected quarterly revenue of approximately $1.986 billion, up 31.65% from a year earlier, and adjusted earnings per share of $1.62, a 76.71% increase. The results reversed pre-earnings profit-taking that had been fueled by concerns over 1.6T optical module orders and margin execution.

Analysts also highlighted that optics are becoming an increasingly important part of AI infrastructure, supporting high-bandwidth interconnects as AI clusters scale. Coherent, along with select peers, stands to benefit from this trend, particularly if geopolitical tensions shift demand toward non-Chinese suppliers.