Marvell’s shares fell after investors decided its giant Google AI deal would take too long to move the numbers. Then Coherent Corp. (NYSE:COHR) and Lumentum Holdings Inc. (NASDAQ:LITE) fell with it on August 28. Barron’s argued the sympathy selloff made little sense because Marvell’s actual data-center results remained strong, especially for the optical demand that matters to Coherent and Lumentum.
Marvell’s data-center revenue grew about 46% year over year, and analysts expect growth to accelerate to roughly 69% and 85% over the next two quarters. That is not an obvious warning for companies selling the optical components that move data between increasingly large AI clusters. The Google disappointment was mainly about when Marvell’s custom-chip revenue arrives, not evidence that hyperscalers suddenly need fewer high-speed optical links.
Photo from Coherent website
The two optics companies also entered the selloff with their own strong numbers. Coherent Corp. (NYSE:COHR) recently reported $2.05 billion of quarterly revenue, with Data Center and Communications revenue rising to $1.62 billion from $1.02 billion a year earlier. Lumentum Holdings Inc. (NASDAQ:LITE) guided to a roughly $1.25 billion revenue midpoint for its next quarter and said AI demand had pulled its long-term target model forward by a quarter. Their shared economic channel is therefore specific: more AI compute requires more bandwidth, which drives transceiver, laser and photonics demand. Marvell’s delayed custom-chip payoff does not directly weaken that bandwidth requirement.
There is still a reason the market can sell good companies on good read-throughs. Coherent and Lumentum had already risen sharply in 2026 before Friday’s move. Expectations around AI optics are extreme, capacity is expanding rapidly, and hardware suppliers can suffer if hyperscaler ordering pauses even when long-term demand remains intact. For Coherent, Data Center and Communications now accounts for most of quarterly revenue, so an AI infrastructure digestion cycle would hit an increasingly important part of the business. Lumentum faces a different version of the same risk: pulling its long-term target model forward is bullish operationally, but it also raises the growth bar investors will expect the company to keep clearing.
Insider Monkey’s database showed 105 hedge funds holding COHR at the end of Q2, down from 114 in the prior quarter, while LITE was held by 111 funds, down from 123. The data shows D.E. Shaw increasing its Coherent stake more than thirteenfold to about 1.64 million shares and Arrowstreet Capital raising its Lumentum stake 239% to about 1.37 million shares. As of August 14, Lumentum short interest was roughly 7.27 million shares, or 8.14% of float, with 1.3 days to cover. Friday’s weakness looks more like AI-trade contagion than a clean deterioration in optical demand, at least based on the evidence available today.
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