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Coherent Stock Surges on Bullish Analyst Call Citing AI Demand
Coherent Inc. (COHR) shares surged more than 7% after StoneX initiated coverage on the photonics and optical components manufacturer with a Buy rating, citing the company's strategic position in the buildout of artificial intelligence infrastructure.
Analyst Cites AI Tailwinds
In a note reported by Investing.com, StoneX analyst Cody Acree began coverage with a Buy rating and a $425 price target. The initiation highlighted Coherent's aggressive expansion of its six-inch indium phosphide capacity, a critical material for the lasers that power optics in AI data centers.
The firm noted that Coherent's management is targeting successive doublings of this capacity through the end of 2027. StoneX also pointed to the company's more than 10 active customer engagements for both co-packaged and near-packaged optics formats, signaling strong industry traction.
Sector-Wide Strength
The bullish sentiment extended across the optical networking sector. StoneX simultaneously initiated coverage on key peer Lumentum Holdings (LITE) with a Buy rating, lifting shares of both companies and reinforcing investor confidence in AI-driven demand for high-speed components.
AdThe rally comes after Coherent's stock had pulled back approximately 29% over the prior month. A supportive broader market, with major U.S. indices trading higher, also contributed to the positive momentum for growth-oriented technology stocks on Thursday.
Wall Street Outlook
The new rating stands in contrast to a recent price target cut from Susquehanna, which trimmed its target to $350 from $425 five days earlier and contributed to the stock's recent weakness. Despite that revision, the broader analyst community remains largely constructive on Coherent, which held 19 Buy ratings and 6 Hold ratings heading into the session.
Investors will be closely watching the company's upcoming earnings release, scheduled for November 4, for further updates on its capacity ramp and revenue trajectory from its AI-related product lines.
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