Record Quarters, Red Screens: Rocket Lab and Coherent Slide While Teradyne Pops on $1 Billion Credit Line
Tuesday’s tape offered a clinic in how unforgiving this market has become for growth names priced for perfection. Rocket Lab, which reported after Monday’s close, delivered record second-quarter revenue of $234.1 million, up 62% from a year earlier and ahead of the roughly $232 million consensus, according to earnings materials reviewed by Investing.com. The stock fell anyway.
The sticking point was the bottom line. Rocket Lab’s adjusted loss of $0.08 per share was wider than the $0.06 loss analysts expected, and free cash flow burn deepened to $110.1 million from $77.4 million the prior quarter, per Investing.com’s review of the company’s slides. Shares closed Monday’s regular session at $80.04, down 3.4%, then slid as much as another 6.8% in extended trading. By Tuesday morning the stock was down about 4% on the session, Charles Schwab noted in its market open commentary.
The selling came despite a backlog that swelled to a record $2.36 billion, more than $800 million in new bookings after quarter-end, and third-quarter revenue guidance of $250 million to $265 million, which would mark another record. The company also said its larger Neutron rocket remains on track for pad delivery in the fourth quarter, with more than 400 hotfire tests completed on its Archimedes engine, per the Investing.com summary.
Coherent, the laser and photonics maker that has become a favorite vehicle for the AI optical-networking trade, had an even rougher stretch. The stock dropped 11.6% on Monday to $335.05, a decline 24/7 Wall St. attributed to profit-taking after a 44% run over the prior week, amplified by a weekend social-media debate over whether optics or memory is the better AI trade. Schwab’s Tuesday morning note flagged the shares down again ahead of the company’s fiscal fourth-quarter report, due Wednesday after the close, where Coherent has guided to revenue of $1.91 billion to $2.05 billion.
Even after the pullback, Coherent remains up more than 100% for the year, per 24/7 Wall St., which is precisely why traders are nervous. Options positioning showed elevated put activity into the print, a sign that investors who rode the rally are paying up for protection rather than adding exposure at these levels.
The session’s standout gainer moved on financing rather than earnings. Chip-test equipment maker Teradyne climbed nearly 6% after securing a $1 billion credit line, TheStreet reported in its Tuesday market coverage, a war chest that gives the company flexibility as semiconductor capital spending accelerates through the AI buildout.
The common thread across all three moves is positioning ahead of Wednesday morning’s July inflation report. With the major indexes camped near record highs, as Schwab put it, investors spent Tuesday trimming their most extended winners and rewarding balance-sheet strength, a defensive crouch that could unwind quickly in either direction once the CPI number hits.
