nLIGHT and Laser Weapons: The Next Capacity Cycle to Aid Prospects

nLIGHT LASR is pushing deeper into directed energy as defense budgets and priorities favor higher-power, fieldable laser solutions. The company’s latest product and program milestones suggest a clear shift from development-heavy work toward more repeatable shipments, with sensing emerging as an additional defense growth lever.

For investors, the story is less about a single contract win and more about whether nLIGHT can scale power, production cadence, and supply chain execution at the same time. That operational mix will shape growth and margin outcomes through 2026 and into 2027.

LASR’s 70kW-Class System Signals a Higher-Power Road Map

nLIGHT’s newly developed 70kW-class Laser Weapon System and the recently released 30kW and 10kW High-Energy Lasers reflects expands portfolio. This sequence matters because it frames a visible progression in power classes, which is a practical marker for where the company wants to compete in directed energy.

The update also underscores that nLIGHT is positioning beyond component supply into higher-value, system-level contributions such as beam combination and control. LASR’s vertically integrated model, spanning chip through system-level components, is central to that push.

In the broader laser ecosystem, incumbents like IPG Photonics IPGP and Coherent COHR highlight how competitive the laser market can be. That competitive backdrop raises the bar for nLIGHT to differentiate not only on power, but on integration and manufacturability as programs scale. LASR shares have outperformed IPG Photonics and Coherent year to date. Shares of nLIGHT have surged 81.4% compared with IPG Photonics and Coherent’s appreciation of 71.8% and 38.5%, respectively.

LASR Stock’s Price Performance

Image Source: Zacks Investment Research

nLIGHT’s Late-Stage Programs Turn R&D Into Shipments

The move up the power curve connects directly to commercialization. Aerospace and Defense (A&D) accelerated across 2025, culminating in record fourth-quarter A&D revenues as HELSI-2 shipments and a DE M-SHORAD delivery drove momentum. For 2025, A&D revenues jumped 60% from 2024 to $175 million, reflecting the mix shift the company is targeting.

A key inflection was the successful delivery of a 50-Kw coherent beam-combined high-energy laser and beam director supporting the DE M-SHORAD program. That milestone helped drive a development revenue surge in the fourth quarter, but management expects development revenue to decline sequentially in the first quarter of 2026 as milestones reset.

This is the core tradeoff investors need to model. Progressing from prototypes and development phases into repeatable shipments can improve visibility when funded backlog supports the build. Funded backlog was approximately $162 million as of Dec. 31, 2025. Even so, milestone-based programs can create quarter-to-quarter lumpiness when testing gates clear and then reset.

LASR’s Sensing Portfolio Broadens Defense Use Cases

nLIGHT’s sensing portfolio is emerging as a complementary defense pathway that can broaden use cases beyond laser weapons. In 2025, laser sensing moved from design wins into production, building a layered set of revenue streams tied to munitions and related platforms.

A new $50 million contract signed in the third quarter of 2025 for a long-running U.S. missile program reinforces embedded positions in munitions restocking. In addition, initial low-rate initial production began in the fourth quarter of 2025 on a new classified sensing program.

This matters for the financial profile. A sensing mix that moves from design wins into production and then into full-rate production can provide steadier revenue progression than milestone-driven development alone. That diversification can help smooth periods when directed energy development milestones roll off, while still supporting a longer-term shift toward higher-margin product shipments as programs mature through 2026 and into 2027.

LASR’s Outlook and Management Commentary

For the first quarter of 2026, nLIGHT expects revenues between $70 million and $76 million. The Zacks Consensus Estimate for first-quarter 2026 revenues is pegged at $70.6 million, indicating 36.6% growth from the figure reported in the year-ago quarter. The consensus mark for earnings is currently pegged at 8 cents per share, up couple of cents over the past 30 days. LASR reported loss of 4 cents per share in the year-ago quarter.

nLight Price and Consensus

nLight price-consensus-chart | nLight Quote

For 2026, nLIGHT expects total revenue growth versus 2025, with A&D expected to grow double digits year over year, supported by existing backlog. The company highlighted a ~$25 million to $30 million fiscal 2026 revenue headwind from the exit of cutting and welding, with modest contribution in the first half and near zero by the second half.

Zacks Rank & Stock to Consider

nLIGHT currently has a Zacks Rank #4 (Sell).

Qnity Electronics Q is a stock worth considering in the broader Zacks Computer and Technology sector. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Qnity Electronics is pegged at 11.5%. In terms of share price movement, Qnity Electronics has surged 43.2% year to date.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Free: See Our Top Stock And 4 Runners Up

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Qnity Electronics, Inc. (Q): Free Stock Analysis Report

Coherent Corp. (COHR): Free Stock Analysis Report

IPG Photonics Corporation (IPGP): Free Stock Analysis Report

nLight (LASR): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research