Coherent Inc. shares surged sharply in mid-day trading, climbing +16.4% to $422.54 and touching an intraday 52-week peak of $433.69 after positive comments on optical technology from NVIDIA CEO Jensen Huang at Computex.
Huang urged companies to rely on copper where feasible but emphasized its limits, saying: "Ultimately, the right strategy is to scale up with copper as long as you can, after that, you scale up further with optics, you scale out with optics and you scale across with optics." Those comments helped crystallize investor interest in the optical networking segment of AI infrastructure.
The intraday strength was reinforced by a round of analyst price-target increases that centered on a more bullish Bank of America outlook for the AI data center market. Bank of America raised its price target for COHR to $400 from $365, and simultaneously lifted its 2030 AI data center total addressable market estimate to approximately $1.7 trillion from $1.4 trillion. That thematic upward revision contributed to broader optimism across related stocks.
Other Wall Street firms followed with their own adjustments. Stifel raised its COHR target to $420 from $412 while keeping a Buy rating, and Rosenblatt increased its target to $425 from $375, also maintaining a Buy. Those upgrades complemented underlying operational momentum for Coherent.
Coherent’s fiscal third-quarter 2026 results provided a tangible performance foundation for the stock’s move. The company reported record revenue of $1.81 billion, which exceeded consensus expectations. Its Datacenter & Communications segment expanded 41% year-over-year and accounted for 75% of total revenue, a concentration that investors viewed as directly tied to AI data center demand. CEO Jim Anderson emphasized the company’s capacity expansion plans, stating: "As AI datacenter infrastructure continues to scale, we are rapidly expanding capacity to meet demand."
Longer-term demand assumptions were further supported by a $2 billion equity investment and a multiyear supply agreement from NVIDIA, arrangements that underpinned investor confidence in sustained orders from a major AI infrastructure customer.
By the close of the trading session, market-data ticks reflected an even stronger move for Coherent, with readings showing COHR +17.64% and peer Lumentum Holdings up +13.72% as Wall Street bet on continued AI data center spending. Broader U.S. equity benchmarks offered a relatively muted backdrop: the S&P 500 gained +0.2%, the Dow Jones added +0.3%, and the NASDAQ rose +0.2% - increases that were small relative to the pace in optical names and that suggest sector-specific and company-specific drivers dominated today’s activity.
In summary, several proximate factors combined to produce Coherent’s outsized session. Bullish comments about optics from a high-profile industry CEO helped focus attention on the technology; a thematic market-size expansion from Bank of America provided a compelling, quantifiable narrative for future demand; multiple analyst price-target upgrades reinforced buy-side conviction; and Coherent’s record quarterly results and its strategic arrangement with NVIDIA offered concrete evidence of both current performance and expected future revenue.
Key points
- Coherent jumped +16.4% intraday to $422.54 and reached a 52-week high of $433.69 following comments on optics by NVIDIA CEO Jensen Huang.
- Bank of America raised its COHR price target to $400 and increased its 2030 AI data center TAM estimate to about $1.7 trillion from $1.4 trillion; additional targets were raised by Stifel and Rosenblatt.
- Coherent reported record fiscal Q3 revenue of $1.81 billion, with its Datacenter & Communications segment growing 41% year-over-year to represent 75% of sales, and it has a $2 billion equity investment plus a multiyear supply agreement from NVIDIA.
Risks and uncertainties
- Analyst-driven price-target revisions can be volatile and may reverse if market expectations for AI data center demand change - this is particularly relevant to the optical networking and AI infrastructure sectors.
- Company-specific execution risk remains: Coherent’s growth depends on its ability to scale capacity to meet AI datacenter demand, which affects the Datacenter & Communications segment and the broader semiconductor equipment supply chain.
- Concentration risk from relying on large customers is present; the $2 billion equity investment and supply agreement with NVIDIA are material to demand assumptions and therefore to investor sentiment in the optical networking space.
The confluence of industry commentary, thematic market-sizing by a major bank, concentrated analyst optimism and strong company results created the conditions for Coherent’s move into all-time high territory, and left optical networking peers participating in the rally.