Coherent (COHR) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Strategic partnerships and agreements

• Announced a significant expansion of partnership with NVIDIA, including a $2 billion equity investment and a multi-year, multi-billion dollar R&D and supply chain agreement focused on photonics and optics for data center innovation and power efficiency.

• The agreement covers multiple product lines, notably high-power CW lasers for CPO, and is expected to drive substantial revenue and catalyze more long-term agreements with other customers.

Capital allocation and capacity expansion

• Top priority for capital allocation is expanding manufacturing capacity, especially at the Sherman, Texas facility, to meet strong demand for CPO solutions.

• Proceeds from divestitures and investments have been used to reduce debt and fund capacity expansion, with leverage ratio reduced to 1.7x, below the target of 2.

• Ongoing annual portfolio reviews ensure investments are focused on high-growth, high-margin areas, with continued divestiture of non-strategic or unprofitable product lines.

Technology and product development

• Doubling indium phosphide capacity this year using 6-inch wafers to address industry constraints and support growth in pluggable transceivers and CPO.

• Launching a 1.6T transceiver based on VCSEL technology in the second half of the year to diversify supply and alleviate indium phosphide constraints.

• OCS (optical circuit switch) solutions using liquid crystal technology are being deployed by multiple customers, with strong demand and focus on ramping manufacturing capacity.