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Why I’m Long On Coherent Corp: AI, Lasers and Durable Margins

  • I am rating Coherent Corp a Strong Buy because I believe its laser and photonics franchise sits at the center of AI-driven semicapex and datacenter optical upgrades. This gives it durable pricing power, a growing backlog and attractive secular margins.


  • Growth will be driven by higher-power fiber lasers for chip fab and materials processing, optics for optical I/O and LiDAR, and scale from the II‑VI/Coherent combination plus expanding service and consumables revenue.


  • Valuation looks favorable on a forward PEG and EV/EBITDA basis once you bake in moderate AI-led growth. Today’s premium P/E of 132.42x understates near-term cashflow optionality and backlog conversion.


  • Biggest risk is cyclical capex weakness in semiconductors. Nevertheless, optionality from non‑semiconductor industrial lasers and hyperscaler optical spend keeps upside intact.

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Source; Talk markets

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