Rich Peter
Investor, Crypto, US Stocks & High-Dividend ETFs
Coherent's pivot to AI optics is paying off as copper gives way to optical links inside large AI clusters. Quarterly revenue topped $2 billion for the first time, up 42%, with datacenter and communications up 59% to 79% of sales. Multi-year contracts with AI leaders including Nvidia extend order visibility into 2028. It launched its PhotonLink interconnect platform at ECOC 2026, and its indium phosphide, VCSEL and 6-inch wafer strengths give it a moat in 800G and 1.6T transceivers. x.com
Coherent is deeply positioned to capture structural AI optical-networking demand as the shift from copper to optical interconnects proves irreversible. Its data center and communications segment is now about 75% of revenue, with 800G and 1.6T transceiver demand exploding as hyperscalers deploy AI clusters, turning a cyclical laser name into a long-duration growth story. Supply constraints for lasers and optical components are easing, and silicon carbide and industrial lasers add further upside. x.com
Coherent's PhotonLink launch positions it as a full-stack AI optical connectivity supplier rather than just a laser maker. The platform spans the whole optical chain, from InP lasers and silicon photonics to fiber, detectors and assembly, and supports both co-packaged and near-packaged optics, so Coherent can profit whichever scales first. It cites 10+ CPO and 10+ NPO engagements with anchor customers and long-term agreements, and revenue should start ramping in Q4 2026. x.com
Coherent should benefit as the shift from copper to light inside AI data centers accelerates, with co-packaged optics now in production and near-packaged optics pulling revenue forward. Nvidia's Spectrum-X Photonics switch is in full production, and TrendForce says CPO has entered mass production. Coherent CEO Jim Anderson says CPO and NPO engagement jumped in the past three to six months, nearly every large customer has a project, and its content per socket is similar in either design. x.com
Applied Optoelectronics, Lumentum and Coherent face share losses at US hyperscalers to Innolight. Channel checks favor Innolight gaining share in Q2 2026, at the expense of those three. Per @poezhao0605, a $7B Hong Kong IPO, the largest in years and upsized from $5B on strong demand, has cleared its listing hearing. x.com
Coherent has a dated revenue catalyst: its PhotonLink is expected to start ramping in Q4 2026, with anchor customers secured for CPO and NPO. The median analyst target is $420. x.com x.com
AI bandwidth demand still favors Coherent and Lumentum, but tight customer financing can delay orders and lasting valuations need durable profits. A model provider losing share need not reduce total bandwidth use. Coherent could beat and raise guidance; Lumentum may only meet estimates this quarter, improving next quarter. If margins partly reflect scarce indium phosphide, added supply will test whether upgrades, volume and cost gains sustain earnings. These earnings calls remain forecasts. … Show more
Coherent is the most potentially undervalued photonics play because the market has not caught up to what it has become. Its March 23 demonstration with Tower Semiconductor of 400 Gbps per lane on a silicon modulator, aimed at 3.2T transceivers, is not priced in. Revenue rose from $1.58B to $1.69B with $1.78B guided, and it was first to mass-produce 1.6T transceivers. Despite running from $61 to $336, it trades at a fraction of Arista's and Broadcom's valuations. x.com x.com
Coherent's 6-inch substrate access, yields and margin concerns look mostly like timing issues in the optical buildout. Coherent is now one of the preferred ways to gain exposure and should participate meaningfully, despite those constraints. x.com
Coherent is becoming the gatekeeper of AI photonics as networking hardware grows as critical and scarce as GPUs. It is the only player to move to 6-inch InP wafers, more than doubling chips per wafer and giving it a cost edge over rivals that buy laser chips, with EML and CW laser capacity set to double in 2026 and again in 2027. Its liquid-cooled XPO optics cut TCO by 20-30%, and its briefing raised its 2030 addressable market to $70B+, including $15B+ for CPO/NPO. x.com
All high-bandwidth data center interconnects will be optical within a few years, making photonics one of the most important AI infrastructure themes. The opportunity spans seven layers: materials and wafers such as AXT and IQE, tools such as Aixtron and Applied Materials, lasers such as Sivers and MACOM, foundries such as Tower and Fabrinet, testing such as Aehr and Teradyne, optics such as Lumentum, Coherent and POET, and networking such as Credo, Marvell and Ciena. x.com
Nvidia's Q1 FY27 results materially improve demand visibility across the optics, networking and photonics stack. Revenue hit $81.6B, up 85%, with networking at $14.8B, up 199%, and Nvidia named multi-year optics deals with Coherent, Corning and Lumentum plus a Marvell partnership on NVLink Fusion and silicon photonics. AI cloud, industrial and enterprise revenue grew 31% sequentially versus 12% for hyperscale, so the buildout is spreading. Vera Rubin ramps in Q3. x.com
