Coherent, Applied Optoelectronics, Lumentum Plunge as Traders Question AI Spending Sustainability
Shares of optical component makers Coherent (down 11%), Applied Optoelectronics (down 10%), and Lumentum (down 9%) fell sharply on July 28, 2026, amid growing trader skepticism about the sustainability of hyperscaler AI capital expenditures. The selloff was triggered by Alphabet's Q2 2026 report showing $44.92 billion in capex (double year-ago) and negative $5.86 billion free cash flow, raising doubts about returns on AI investment. Despite the declines, all three stocks retain significant year-to-date gains (Coherent +28%, Lumentum +71%, Applied Optoelectronics +150%). The broader semiconductor sector also fell, with the SOXX ETF down 4%. Celestica bucked the trend with 62% revenue growth, highlighting a contradiction between booming AI supply chain fundamentals and trader sentiment. The article notes high valuations (Lumentum P/E 110x, Coherent P/E 113x) as contributing factors to the profit-taking.
Editorial responsibility
- No named human review is recorded for this page.
- Reports are grouped by semantic similarity and deterministic rules. Language models may assist titles, summaries, translation and cross-source analysis; the page itself is projected from evidence records.
- Current automated evidence projection