Coherent Shares Soar 2.91% on AI Growth Strategy

Coherent(COHR) shares experienced a significant intraday gain of 2.91%, reaching their highest level since February 2025, despite a 3.62% decline in the overall market.

The strategy of buying COHR shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a 7.5% annualized return. However, the overall performance was slightly underwhelming, as the strategy missed out on the broader market's gains. This suggests that while the strategy provided some stability, it may not have been the most optimal approach for capturing longer-term growth in COHR.

Coherent Corp recently unveiled a robust growth strategy at its 2025 Analyst and Investor Day, projecting over 22% revenue growth and a 2.8x increase in earnings per share (EPS) for the fiscal year 2025. The company is strategically focusing on high-growth AI datacenter markets, utilizing its extensive optical technology portfolio to capitalize on the surging demand for AI computing and advanced optical technologies. This strategic shift positions Coherent to benefit from the rapidly expanding AI and optical technology sectors.

In addition to its focus on AI datacenters, Coherent is also diversifying into industrial applications. This diversification aims to ensure revenue stability while driving expansion into high-growth segments. The company has introduced a new market-aligned segmentation strategy to enhance investor visibility into its distinct business units. This move is expected to provide clearer insights into the performance and growth potential of each segment, fostering greater investor confidence.

The company's CFO emphasized a commitment to accelerating profitable revenue growth, indicating a mature business model that targets sustainable profitability with double-digit growth and margin expansion. This focus on profitability and growth is expected to drive long-term value for shareholders, positioning Coherent as a leader in the optical technology and AI computing sectors.