erent (US:COHR) Benzingaยท2025-04-04 19:17Core Viewpoint - Analyst Mike Genovese upgraded Coherent Corp from Neutral to Buy, lowering the price target from $115 to $85, citing a positive outlook for AI transceivers in the second half of 2025 driven by strong demand for Coherent ZR transceivers in Data Center Interconnect and telecom applications [1] Group 1: Market Outlook - The analyst is optimistic about the transceiver market through 2030, viewing co-packaged optics (CPO) as an opportunity due to new products like Ultra-High-Power lasers and Optical Circuit Switches [2] - Coherent is expected to see a sequential acceleration in 800G Datacom transceiver sales in the September and December quarters, driven by shipments of Blackwell GPUs ordered in the first half of 2025 [6] Group 2: Company Performance - Coherent has achieved approximately $300 million in quarterly sales from 800G Datacom transceivers, making it the second-largest player in global market share after Innolight [5] - Telecom revenues for Coherent grew 11% year over year in the second quarter of 2025, following a 17% growth in the first quarter [6] Group 3: Product Development and Strategy - Coherent is making progress in commercializing 200G VCSELs and 100G and 200G EMLs, with management expressing confidence in the ramp-up of new products [3][7] - The company has the most extensive portfolio of CPO components among vendors and is participating in OCS deployments with significant Hyper Scalers [8] Group 4: Competitive Landscape - Lumentum Holdings is currently ahead in EML capacity, but Coherent is close to ramping up its own EML production [9] - Coherent's manufacturing locations face varying tariff rates, including 24% on Malaysian goods and 54% on Chinese goods, which may impact cost structures [10]