Why IPG Photonics Jumped 35% Today, Even as the Markets Were Down

Shares of industrial laser leader IPG Photonics (NASDAQ: IPGP) rocketed 35.8% on Thursday as of 3:00 p.m. EDT.

The rally was all the more impressive given that the broader stock market indexes were down at the time, and by quite a bit.

IPG reported fourth quarter 2025 earnings today; needless to say, results impressed Wall Street by surprising to the upside, along with first quarter guidance that also handily beat estimates.

IPG awakes from a long slumber

IPG has had a difficult half-decade or so. Even with today's rally, the stock remains 58% below its 2018 all-time high, which the stock nearly reached again during the 2021 bull market. A combination of weakening industrial markets, Chinese competition, and Russia's invasion of Ukraine all complicated IPG's business in various ways. Having been a founder-led company since inception, IPG appointed its first "outsider" CEO, Mark Gitin, in 2024.

The fourth quarter showed IPG's industrial end markets appearing to bottom, with Gitin's strategy of refocusing on high-profit and new end-markets beginning to pay off.

In Q4, revenue accelerated 17% to $274.5 million, while adjusted (non-GAAP) earnings per share grew 53% to $0.46, with both figures beating estimates by a significant amount. Looking ahead to the first quarter, management sees revenue of $235 million to $265 million and adjusted EPS of $0.10 to $0.40, above analyst expectations of $243.4 million and $0.25, respectively. Management also authorized a new $100 million share repurchase program, signaling further confidence.

Image source: Getty Images.

IPG's impressive turnaround should continue

In addition to the good results, management commentary was positive. In particular, the large battery production end-market in China recovered, as that market is shifting to advanced batteries for energy storage, which require more sophisticated welding techniques.

The medical end market also grew 21% in the quarter, as the company's urology lasers secured new customers. And IPG also makes lasers for semiconductor equipment, which is a small segment for IPG but is obviously booming right now, thanks to the AI revolution.

Finally, IPG just introduced its new CROSSBOW laser last Fall, a low-cost laser for the defense industry that can neutralize small drones from the air. The defense sector is an entirely new segment for IPG, which will establish a new facility in Alabama to support the product.

With core markets beginning to recover and the company unveiling new advanced products that aren't even included in current results, it's no wonder IPG is rising again today.

Billy Duberstein has no position in any of the stocks mentioned. The Motley Fool recommends IPG Photonics. The Motley Fool has a disclosure policy.