We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Coherent's Product Range Positioning It as a Premium AI Asset?
Read MoreHide Full Article
Key Takeaways
Coherent's datacenter segment grew 33.5% y/y, contributing 72% to the total revenue in Q2'26.
COHR benefits from strong demand for 800G and 1.6T transceivers, boosting bookings and sales.
Coherent ramps up 6-inch InP output and taps $2B OCS market to expand AI-driven revenue opportunities.
Coherent Corp. (COHR - Free Report) registered 33.5% year-over-year growth in its datacenter & communications segment’s revenues in the second quarter of fiscal 2026. This segment generated 72% of the top line, a significant jump from the year-ago quarter’s 63%. It is evident that the company is moving on its growth trajectory on the back of its success within the AI market.
The company witnessed a surge in its product demand as a result of rising direct bookings. The heightened adoption of 800G and 1.6T transceivers played an important role in boosting its top line. On the Indium Phosphide (InP) production front, Coherent is the only producer of the 6-inch InP, which it is ramping actively across Sherman and Jarfalla for the heightened transceiver demand. This boost in production is made to support the high-power CW laser demand that the company has anticipated to witness in the near term.
The rise in demand during the second quarter of fiscal 2026 was not only dependent on the growing demand for transceivers, but also for Optical Circuit Switch (OCS) Systems. The OCS Systems market adds more than $2 billion in addressable market opportunity in the long run, expanding its capacity to boost revenues.
COHR’s focus on the next-gen optical interconnects and InP manufacturing positions it to capture a larger chunk of the AI hardware market share. As the industry shifts toward complex components, Coherent will not remain a mere player in the AI domain but a game-changer of the infrastructure required to power it.
COHR’s Price Performance, Valuation & Estimates
Coherent’s stock has rallied a whopping 304.7% in a year against the industry’s 22.9% growth. COHR’s industry peers Dave (DAVE - Free Report) and GDS Holdings (GDS - Free Report) surged 89.7% and 98.3%, respectively, in the same period.
1-Year Share Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, COHR trades at a forward 12-month price-to-earnings ratio of 37.19X, higher than Dave and GDS Holdings’ 10.68X and 25.74X, respectively.
P/E - F12M
Image Source: Zacks Investment Research
Coherent and GDS Holdings have a Value Score of D. Dave carries a Value Score of C.
The Zacks Consensus Estimate for COHR’s earnings for 2026 and 2027 has increased marginally and 1.5%, respectively, over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Is Coherent's Product Range Positioning It as a Premium AI Asset?
Key Takeaways
Coherent Corp. (COHR - Free Report) registered 33.5% year-over-year growth in its datacenter & communications segment’s revenues in the second quarter of fiscal 2026. This segment generated 72% of the top line, a significant jump from the year-ago quarter’s 63%. It is evident that the company is moving on its growth trajectory on the back of its success within the AI market.
The company witnessed a surge in its product demand as a result of rising direct bookings. The heightened adoption of 800G and 1.6T transceivers played an important role in boosting its top line. On the Indium Phosphide (InP) production front, Coherent is the only producer of the 6-inch InP, which it is ramping actively across Sherman and Jarfalla for the heightened transceiver demand. This boost in production is made to support the high-power CW laser demand that the company has anticipated to witness in the near term.
The rise in demand during the second quarter of fiscal 2026 was not only dependent on the growing demand for transceivers, but also for Optical Circuit Switch (OCS) Systems. The OCS Systems market adds more than $2 billion in addressable market opportunity in the long run, expanding its capacity to boost revenues.
COHR’s focus on the next-gen optical interconnects and InP manufacturing positions it to capture a larger chunk of the AI hardware market share. As the industry shifts toward complex components, Coherent will not remain a mere player in the AI domain but a game-changer of the infrastructure required to power it.
COHR’s Price Performance, Valuation & Estimates
Coherent’s stock has rallied a whopping 304.7% in a year against the industry’s 22.9% growth. COHR’s industry peers Dave (DAVE - Free Report) and GDS Holdings (GDS - Free Report) surged 89.7% and 98.3%, respectively, in the same period.
1-Year Share Price Performance
From a valuation perspective, COHR trades at a forward 12-month price-to-earnings ratio of 37.19X, higher than Dave and GDS Holdings’ 10.68X and 25.74X, respectively.
P/E - F12M
Coherent and GDS Holdings have a Value Score of D. Dave carries a Value Score of C.
The Zacks Consensus Estimate for COHR’s earnings for 2026 and 2027 has increased marginally and 1.5%, respectively, over the past 60 days.
COHR currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.