Core Thesis - Coherent Corp. is positioned for significant growth, with the market yet to fully recognize its potential, as evidenced by its recent performance and operational strength [1][2][6]. Financial Performance - The company has achieved ten consecutive double-beats over more than two years, indicating consistent outperformance [3]. - Gross margins are approaching 40%, and operating margins are nearing 20%, reflecting improved profitability [3]. Market Dynamics - Demand visibility has significantly expanded, with constrained supply in critical optical and laser segments reducing execution risk [4]. - The industrial-laser segment, which has historically underperformed, is expected to turn positive in the next quarter, alleviating a long-standing drag on earnings [4]. Competitive Positioning - Coherent's leadership in networking optics sets it apart from competitors like Lumentum and Broadcom, which do not offer the same growth-at-a-reasonable-price (GARP) profile [5]. Growth Potential - Analysts have raised the 12-month price target from $200 to $225, with a three-year potential target of $500, indicating the market's underappreciation of the company's growth trajectory [6]. - The combination of strong demand, margin expansion, and operational leverage positions Coherent as an exceptional growth story with both visibility and scalability [6].

SAXONBURG, Pa., Dec. 03, 2025 (GLOBE NEWSWIRE) -- Coherent Corp. (NYSE: COHR), a global leader in photonics, today announced a major milestone in its next-generation 300mm silicon carbide (SiC) platform to address increasing thermal efficiency demands in AI datacenter infrastructure. Coherent, a pioneer in large-diameter SiC substrates, has leveraged its proven 200mm platform expertise to develop a next-generation 300mm solution, engineered to manage rising thermal loads, that meets the accelerating perform ...

Market Analysis by covering: Ciena Corp, Coherent Inc, Lumentum Holdings Inc. Read 's Market Analysis on Investing.com ...

High-speed optical cables and server racks represent surging AI data-center demand boosting revenue for Ciena, Lumentum, and Coherent. Key Points AI-driven demand for high-speed optical networking is fueling a major rally in communication technology stocks. Companies like Ciena, Lumentum, and Coherent are seeing record revenue growth from cloud and hyperscaler customers. Despite steep P/E ratios, strong forward earnings and expanding margins point to sustained long-term potential. Interested in Ciena ...

Company Overview & Market Position - Vertiv Holdings (VRT) is a global designer and manufacturer of digital infrastructure technologies for communication networks and data centers [2] - Vertiv partners with Nvidia in a high-density reference design for extreme power and thermal requirements of Nvidia's 72 GPU rack scale systems [3] - Coherent Corporation is a global leader in lasers, optics, and photonic components used across various industries including AI [16] - Coherent is emerging as an important player in AI due to the shift towards silicon and photonics-based networking in data centers [15][19] Industry & Ranking - Vertiv Holdings is part of the Zach's Computers IT Services Industry Group, ranked in the top 32% [7] - The top 50% of Zach's ranked industries outperforms the bottom 50% by a factor of more than 2:1 [8] - Coherent has a Zach Rank of 2, driven by analyst upgrades [22] Financial Performance & Estimates (Vertiv) - Vertiv has delivered a 1489% average earning surprise over the last four quarters [9] - Vertiv reported third-quarter earnings of $124 per share, a 24% beat versus the Zach's consensus estimate, with earnings growing 63% from the same period last year [10] - Estimates for Vertiv's fourth quarter have been increased by 323% in the past 60 days [11] - Vertiv's Q4 Zach's consensus estimate now stands at $128 per share, reflecting potential growth of nearly 30% relative to the year-ago period [12] - Vertiv's revenues in the fourth quarter are projected to climb more than 22% to $286 billion [12] Financial Performance & Estimates (Coherent) - Analysts covering Coherent have unanimously upgraded their earnings estimates [22] - Coherent's current quarter estimates have jumped by 8%, next quarter is up by 95% [22] - Coherent's current year estimates have increased by almost 10% over the last 30 days, and next year earnings estimates have risen by 4% [23] - Coherent's sales are expected to grow 15% this year and 145% next year [23] - Coherent's earnings are expected to grow 256% annually over the next three to five years [25] Stock Performance & Valuation - Vertiv (VRT) stock is up nearly 200% off the April lows [12] - Coherent's stock is up approximately 50% this year and has tripled from the April lows from $50 to $161 [26] - Coherent is trading at 327 times forward earnings [25]

Core Insights - Coherent Corp.'s Silicon Carbide (SiC) substrates are essential for enhancing energy efficiency in electric vehicles (EVs), with the global EV market projected to grow at a CAGR of 32.5% through 2030, presenting significant growth opportunities for the company [1][8] Investment and Financial Performance - Coherent secured a $1 billion investment from Denso Corporation and Mitsubishi Electric Corporation in late 2023, which included minority stakes in the SiC business and supply agreements for substrates and epitaxial wafers, enhancing the company's financial flexibility for SiC expansion [2] - The company reported a 17% year-over-year growth in revenue for the first quarter of fiscal 2026, with gross margin expansion of 249 basis points, following a 23% revenue increase and 400 basis points gross margin growth in fiscal 2025, driven by demand from AI-related datacenters and communications [3][4] Competitive Landscape - Despite strong growth indicators, Coherent faces competitive pressure from Cognex and Applied Materials in the battery process equipment sector, which could impact pricing and market share [5][8] Stock Performance and Valuation - Over the past year, Coherent's stock has increased by 58.5%, outperforming the industry average of 11.8% and surpassing Cognex's 4.7% decline and Applied Materials' 39% growth [6] - Coherent trades at a forward price-to-earnings ratio of 29.58X, which is higher than the industry's 25.22X, while Applied Materials and Cognex trade at 26.19X and 34.13X, respectively [10] - The Zacks Consensus Estimate for Coherent's earnings for fiscal 2026 and 2027 has risen by 9.6% and 3.9% over the past 60 days, indicating positive market sentiment [13]

Group 1: Semtech Corp Financial Results - Semtech reported third-quarter revenue of $267 million, missing analyst estimates of $268.83 million [1] - The company reported third-quarter adjusted earnings of 48 cents per share, beating estimates of 45 cents per share [1] Group 2: Stock Performance - Semtech shares dipped 7.2% to $65.00 in pre-market trading [2] - Other stocks also experienced declines in pre-market trading, including Arcus Biosciences Inc, which fell 6.7% to $21.63, and Nanobiotix SA, which fell 6.2% to $20.64 [4]

Stake Sale - Bain Capital offered a block of Coherent shares for as much as $1.14 billion [1] - Bain Capital is continuing to sell down its stake in the laser equipment maker [1]

Core Insights - The AI megatrend is benefiting not only major players like Nvidia and hyperscalers but also companies involved in the infrastructure for AI, particularly optical components suppliers [1][2][3] Industry Overview - The global optical components market is valued at approximately $287.3 billion in 2023 and is projected to reach $628.8 billion by 2032, indicating a compound annual growth rate (CAGR) of 9.2% [3] - Optical components are essential for enabling faster data movement and lower power consumption, which are critical for scaling AI technologies [3] Company Spotlight: Coherent Corp. (COHR) - Coherent Corp. is a global technology company established in 1971, focusing on photonics, optical materials, devices, lasers, and compound semiconductors [5] - The company has a market capitalization of $21.9 billion and has seen its stock price increase by 60% year-to-date [6] - Coherent has consistently met earnings estimates over the past two years, with Q1 2025 revenues of $1.58 billion, reflecting a 17% year-over-year increase, and earnings of $1.16 per share, representing a 73.1% annual growth [7]

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco emphasizes the importance of understanding investment objectives, risks, charges, and expenses before making investment decisions [1] - The firm provides educational information but does not offer specific investment recommendations or tax advice [1] - Invesco's opinions are based on current market conditions and may change without notice, reflecting a dynamic investment environment [1] Group 2 - Invesco Distributors, Inc. serves as the US distributor for Invesco Ltd.'s retail products and collective trust funds [1] - The company operates through various affiliated investment advisers that provide advisory services without selling securities [1] - Invesco Unit Investment Trusts are distributed by Invesco Capital Markets, Inc. and other broker-dealers, indicating a broad distribution network [1]