Stock Track | COHERENT Plummets 5.10% Intraday Amid China Rare Earth Concerns and Profit-Taking Pressure

Stock Track05-18

COHERENT's stock plummeted 5.10% during intraday trading on Monday, extending a multi-session correction for the optical communications component maker.

The sharp decline reflects growing investor concerns over potential supply chain disruptions. A key factor is China's ongoing export controls on critical minerals, particularly indium, which is essential for manufacturing the indium phosphide used in next-generation photonic chips. As a company holding a 40% global market share in indium phosphide optical components, COHERENT faces risks of higher input costs, allocation problems, and delayed capacity expansion if Chinese licensing remains restrictive.

Additionally, the stock continues to face profit-taking pressure following its recent surge to all-time highs, compounded by a broader pullback within the optical communications sector. This technical selling persists despite COHERENT's strong recent fiscal performance and a major strategic investment, highlighting fragile sentiment in the technology sector.

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