JPMorgan Reaffirms Overweight on Coherent Corp.'s AI Optics Push

Coherent Corp. (COHR)’s next‑gen “co‑packaged optics” technology is poised to become a cornerstone of AI data‑center infrastructure, and JPMorgan backs this development with an Overweight rating.

Coherent Corp.'s AI Optics Playbook

The firm is a global supplier of optoelectronic components, lasers, and engineered materials. Its newest co‑packaged optics solution aims to boost data‑center bandwidth while cutting power consumption.

JPMorgan's Assessment Highlights

After a management meeting on July 22, JPMorgan reiterated its Overweight stance. Analysts emphasized:

■Datacom pricing remains healthy, with demand outpacing supply.

■Adoption cycles stay compressed, sustaining price pressure.

■Co‑packaged optics is expected to start generating material revenue in H2 2026.

■Revenue growth should accelerate further in H2 2027 as customers fully scale their systems.

Raymond James' Target and Market Outlook

On June 2, Raymond James lifted the price target for COHR from $371 to $435 and maintained a Strong Buy rating. The note highlighted that the company is well‑positioned in AI data‑center interconnect architectures, with its broad optical portfolio and IP still under‑appreciated, offering upside from both transceiver and non‑transceiver sales.

Investor Takeaways

■Technology roadmap: Speed of commercial rollout for co‑packaged optics could accelerate revenue timelines.

■Competitive landscape: Monitor rival AI‑focused optics providers for pricing and performance dynamics.

■Macro backdrop: Ongoing US‑China supply‑chain tensions and on‑shoring trends may act as additional catalysts for Coherent.

Markets are watching Coherent Corp.’s innovative optics and the bullish outlook from JPMorgan and Raymond James. If co‑packaged optics drives revenue as projected in 2026, the stock could sustain a 30‑45% upside in the medium term; however, technology risk and competitive pressure may elevate volatility. A modest allocation to COHR within a diversified portfolio would balance risk‑return considerations.