Coherent Corp. (Coherent (COHR)) reported fiscal third-quarter results after Wednesday's close that beat Wall Street expectations, driven by booming demand from AI data centers. Shares slipped a bit in premarket trading Thursday, but that's a blip compared to the stock's nearly 400% run over the past year.

The company posted revenue of $1.806 billion for the quarter, up 20% from a year ago and ahead of the analyst consensus of $1.780 billion. Adjusted gross margin expanded 105 basis points year over year to 39.6%, a sign that Coherent is not just growing revenue but doing so profitably. Adjusted earnings came in at $1.41 per share, just a penny above the $1.40 estimate, but a beat is a beat.

CEO Jim Anderson credited the surge to AI data center infrastructure spending, which he said is accelerating. "As AI datacenter infrastructure continues to scale, we are rapidly expanding capacity to meet demand," Anderson said in the earnings release. "With the breadth of our photonic technology portfolio and our manufacturing scale, we believe Coherent is uniquely well positioned to capitalize on this multi-year growth opportunity."

For the fourth quarter, Coherent expects adjusted earnings of $1.52 to $1.72 per share, compared with the analyst consensus of $1.53. Revenue is forecast to land between $1.91 billion and $2.05 billion, versus expectations of $1.912 billion. The company also projected non-GAAP gross margin of 39% to 41% for the quarter, with non-GAAP operating expenses between $360 million and $380 million.

Coherent shares were down 3.14% at $333.85 in premarket trading Thursday, according to market data. That's a modest pullback for a stock that has surged about 395% over the past year as investors have piled into companies supplying the AI data center buildout.