What Happened?
Shares of laser company nLIGHT (NASDAQ: LASR) jumped 7.9% in the afternoon session after the stock's positive momentum continued as the company reported strong third-quarter results driven by its defense business and provided an upbeat forecast for the next quarter.
The laser manufacturer's third-quarter revenue grew 18.9% year-over-year to $66.74 million, beating expectations. This performance was powered by a 50% yearly jump in its aerospace and defense revenue, which hit a new quarterly record. Additionally, the company's adjusted profit of $0.08 per share was well ahead of what analysts had projected. Looking ahead, nLIGHT guided for next quarter's revenue to be around $75 million, which was nearly 23% higher than analysts anticipated. The company also announced a new $50 million contract for laser sensing tied to restocking munitions. Following the positive report, Cantor Fitzgerald raised its price target on the stock to $40.00 from $33.50.
Is now the time to buy nLIGHT? Access our full analysis report here.
What Is The Market Telling Us
nLIGHT’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 4.2% on the news that markets became increasingly wary of high valuations following a significant AI-driven rally.
The tech-heavy Nasdaq fell approximately 1.4% as a wave of caution swept through the market. A key example of this trend is Palantir Technologies, which saw its shares drop around 7% despite reporting record quarterly results that surpassed analyst estimates and raising its full-year revenue outlook. This seemingly contradictory movement highlighted a broader sentiment shift. Investors appeared to be engaging in profit-taking, concerned that the recent surge in AI-related stocks had led to stretched valuations. This broader market caution affected high-growth technology companies that had previously surged on AI optimism but faced increased scrutiny, signaling a potential cooling-off period for the sector. Adding serious weight to this caution, leadership at both Goldman Sachs and Morgan Stanley highlighted the possibility of a correction in the equity markets over the next couple of years. Despite the euphoria driven by AI optimism and the promise of future rate cuts, these banks viewed this cooling-off period not as a disaster, but as a necessary and healthy feature of a long-term bull market.
nLIGHT is up 259% since the beginning of the year, and at $37.33 per share, has set a new 52-week high. Investors who bought $1,000 worth of nLIGHT’s shares 5 years ago would now be looking at an investment worth $1,304.
P.S. In tech investing, "Gorillas" are the rare companies that dominate their markets—like Microsoft and Apple did decades ago. Today, the next Gorilla is emerging in AI-powered enterprise software. Access the ticker here in our special report.
