COHR Stock: Coherent Corp Booms on Data Center Demand

Incorporated in 1971, Pennsylvania-based Coherent Corp [COHR] has regularly outperformed the market in its long history, thanks in part to broad-based demand for its optical components and laser systems. 

Lately, the company has become an under-the-radar beneficiary of the artificial intelligence (AI) boom, with demand for its products in data centers driving financial gains. 

Coherent’s global business operates in three segments: Networking, which develops devices for data center and communications applications; Materials; and Lasers, which includes key tools for semiconductor and precision manufacturing. 

Thus, as a ‘picks and shovels’ stock serving both the AI data center and semiconductors markets, the company has seen impressive growth in recent quarters and issued strong forecasts. 

With its stock price gaining over 100% in the past 12 months, investors may be wondering if it’s too late to hop on the bandwagon, or if Coherent is set to keep delivering. 

Laser Focus

At the end of October 2025, Coherent announced its intent to sell its materials processing product division to Bystronic [BYSTF], a Switzerland-headquartered metal processing company. While the terms of the deal were not publicly announced, the deal is expected to close in early 2026, with proceeds used to reduce debt. In a press release, Coherent CEO Jim Anderson said that the transaction “is the result of our portfolio review process, and furthers our strategy to concentrate efforts on core growth markets and products.”

The company has put a focus on refinancing its debt, paying around $400m in Q1 2026. In quarterly earnings released on November 5, the company reported a 17% year-over-year rise in revenue to $1.58bn, beating estimates of $1.54bn, and GAAP EPS of $1.19, well beyond the consensus of $0.29. The company’s forecast was also bullish, expecting adjusted EPS in the $1.10–1.30 range and revenue in the $1.56bn–1.7bn, both above Wall Street expectations. 

In the months since its earnings review, the company has announced a steady stream of new products, including a 300mm silicon carbide platform to help manage rising thermal loads in AI datacenters, and an optical filter with higher resolution for data center and telecommunications applications. 

COHR’s Rise Continues

Coherent’s share price has had a bumper 2025, surging from $94.73 at the start of the year to $184.57 by its close, representing a nearly 100% gain. Aside from general positive sentiment surrounding the semiconductor ecosystem — buoyed by chip juggernaut Nvidia [NVDA] — strong earnings, new product launches and bullish analyst rating have helped the stock recover from a dip in April. 

COHR stock closed January 13 at $190.03, hovering around a 52-week high. The stock is up 111.45% in the past 12 months and up 2.69% since the start of the year. 

Optics Heyday: COHR vs GLW vs LITE

Coherent is not the only optical solutions company benefiting from the data center buildout. Increased computing demand has also allowed several of its peers to kick into overdrive, including Corning [GLW] and Lumentum Holdings [LITE].

Corning is a US multinational company that manufactures advanced glass, ceramics and optical materials for industrial and scientific applications. Even older than Coherent — it was founded in 1851 — it has nonetheless managed to capitalize on the AI data center boom through sales of fiber optics products. In Q3 2025 it recorded revenue of $4.27bn, up 17% year-over year, propelled by 33% revenue growth in its optical communications segment and 58% revenue growth in enterprise optical communications. Management also predicted that AI infrastructure demand could help double or triple the fiber optic markets, although the long-term sustainability of this demand remains to be seen. In an unrelated boost, in August 2025, Apple [AAPL] committed $2.5bn to producing all of the cover glass for iPhones and Apple Watches in Corning’s Kentucky manufacturing facility. 

Also a designer and manufacturer of optical products, Lumentum Holdings operates in two main segments — Cloud & Networking and Industrial Tech — and earns approximately 60% of its revenue from AI infrastructure applications. In Q1 2026, reported in early November, the company recorded $533.8m in revenue, up 58% year-over-year. For the upcoming quarter Lumentum forecasts revenue in the $630m–670m range and non-GAAP diluted EPS in the $1.30–1.50 range. 

Here are how the three stocks’ fundamentals compare: 

Source: Yahoo Finance

COHR Stock: The Investment Case

The Bull Case for Coherent

Much of the bull case for Coherent relates to the so-called “second wave” of AI investment and monetization. While fears of a AI bubble remain relevant, ‘picks and shovels’ stocks supporting infrastructure buildout could continue to benefit from the boom, making it a longer-term trend. 

Steven Cress, writing for Seeking Alpha, recently identified COHR as one of his top 10 stocks for 2026. He cited its role in eliminating supply chain constraints, as well as the way sales of its optical solutions are supporting the need for high-speed data. 

Morgan Stanley also expects Coherent and other stocks in the optics and laser business to continue to outperform, thanks to the heavy AI-related investment going into such technologies. In a 2026 outlook, analysts Meta Marshall and Mary Lenox asserted that, “if AI capex data points continue to get revised meaningfully positively, our short-term expectations for optical names will hold for the entire year (as it did in 2025).”

Morgan Stanley also increased its price target from $150 to $180, though the new target represents a downside of 5.28% from the January 13 close. 

The Bear Case for Coherent

While demand for its products could remain high, the sustainability of the AI infrastructure buildout remains to be seen. If the bubble should pop, even ‘picks and shovels’ stocks like Coherent could be set for a downturn. 

Most COHR bears cite the stock’s rising valuation, arguing that its year-long rally has already pushed it past its fair value. According to data from the Wall Street Journal, the average analyst price target is $181.82, representing a downside of 4.32% from the January 13 close. The low price target, $113, represents a downside of 40.54%. Competition also remains an important headwind for Coherent, with the potential for low-cost competitors from Asia to undercut its most valuable products. 

Conclusion

Many analysts expect the AI boom to continue into 2026, with growth and investment focusing on players involved in infrastructure buildout. As one such company, Coherent looks set to benefit from its diversified product range and continued demand for data center and chipmaking equipment. However, whether AI spending can continue at the same breakneck pace remains to be seen.