Needham Reiterates Buy Rating on Coherent with New PT at $120

Needham Reiterates Buy Rating on Coherent with New PT at $120

Needham & Company has reaffirmed its buy rating on Coherent Corporation (COHR) and raised its price target to $120. The analyst firm acknowledges the company's strategic position in the optical networking revolution, driven by advancements in photonics and vertical integration [2].

Coherent's next-generation Optical Circuit Switch (OCS) platform, which includes non-mechanical switching and ECOC 2024 recognition, expands its addressable market to $2 billion for AI data centers. The company is poised to achieve $5.81 billion in revenue by 2025, with a non-GAAP gross margin of 37.9%, driven by cost cuts and divesting low-margin aerospace units [2].

Strategic partnerships, such as the Apple VCSEL collaboration, and significant R&D investments, particularly in 1.6 trillion transceiver units, reinforce Coherent's leadership in power-efficient and scalable AI infrastructure solutions. The company's market potential is projected to reach $30 billion by 2030, positioning it as a top-tier long-term growth play [2].

Needham's updated assessment highlights Coherent's operational discipline and technological edge in the rapidly evolving landscape of optical networking and AI-driven datacom. The firm's focus on high-margin markets and innovative solutions aligns well with the surging global demand for AI infrastructure, making Coherent an attractive investment opportunity.

References:
[1] https://finviz.com/quote.ashx?t=MRVL&ty=oc
[2] https://www.ainvest.com/news/coherent-corp-strategic-position-optical-networking-revolution-high-conviction-buy-2025-2508/