NEW YORK, May 13, 2026, 09:03 EDT
- BofA bumped its Coherent price target up to $400 from $365, sticking with a Neutral rating.
- Focus is squarely on demand for 800G and 1.6T optical transceivers—key hardware for AI data centers.
- Trade talks between China and the U.S., plus ongoing worries over export controls, still hang over the sector.
BofA Securities bumped its price target on Coherent Corp. up to $400 from the previous $365 on Wednesday, pointing to robust appetite for high-speed optical transceivers. The firm stuck with its Neutral rating. Coherent shares traded near $374, just shy of their 52-week peak at $385, data from Investing.com show.
Timing is key here. Investors are watching to see if Coherent’s dramatic rerating actually sticks, especially now that artificial-intelligence data center spending is veering away from just chips and toward the gear connecting them.
Transceivers—compact modules that handle data traffic on networks—are crucial for cloud operators scaling up their AI clusters. BofA’s Vivek Arya flagged Coherent as “best positioned to benefit” from growing demand for 800G and 1.6T transceivers, the faster connections now in focus. Investing.com
Coherent turned in fiscal third-quarter revenue of $1.81 billion, a 21% jump from last year. GAAP gross margin landed at 37.7%, and the company posted adjusted earnings of $1.41 per share. CEO Jim Anderson credited rising demand in data-center and communications markets for the “accelerating revenue growth” and improved margins. Coherent Inc
The filing spells it out: Datacenter & Communications is Coherent’s growth engine right now. That segment jumped 41% to $1.36 billion for the March quarter. Industrial, by contrast, dropped 16%, coming in at $444 million. The company credited the datacenter gains to strong demand tied to AI and data-center interconnect needs.
This is a busy trade, but there’s a rationale behind it. Back in March, Nvidia pledged $2 billion apiece for Coherent and for Lumentum, which is another major player in optical components. Those deals? They came bundled with multibillion-dollar purchase commitments and rights to get their hands on advanced laser and optical-networking tech.
So, Coherent is starting to look less like your standard industrial laser maker and more like an AI infrastructure play, at least from the investor perspective. Nvidia CEO Jensen Huang said the two firms are collaborating on “next-generation silicon photonics”—tech built to push data around inside massive computing systems faster, using less energy. NVIDIA Newsroom
China’s on the radar, too. Coherent CEO Jim Anderson is reportedly one of several U.S. executives lined up for President Donald Trump’s China delegation, joining names from Micron, Qualcomm, Apple, and Meta. The group heads to China May 13-15, planning to talk trade and tech restrictions.
Trump landed in Beijing on Wednesday, flanked by executives like Nvidia’s Huang and Elon Musk, according to Reuters. Most of the delegation represented firms aiming to iron out China-related challenges. Reuters also noted that Beijing is pressing Washington to roll back restrictions on advanced semiconductors and chipmaking gear.
Markets aren’t betting on a smooth outcome here. According to a Polymarket contract, odds of a U.S.-China tariff deal by May 31 are running around 62%. That points to a tilt in favor of an agreement, though there’s still plenty of uncertainty left on the table.
Still, the set-up is anything but straightforward. Coherent reported that tariffs and export curbs didn’t have a significant impact on its third-quarter numbers. Even so, the company flagged ongoing global trade disruptions as a threat that could shrink revenue, push up input costs, or put production on hold. That’s the catch for the faster-growth narrative.
Supply-chain strains persist. Reuters said China and the U.S. are weighing an extension to their rare-earths truce, yet Chinese customs figures indicate exports for certain heavy rare earths have dropped nearly 50% since the April 2025 restrictions.
Wall Street’s eyes are on a handful of questions: Will Coherent boost capacity, defend margins, and keep its slice as clients shift to higher-speed links? BofA raised its target, suggesting it might be possible. But with a Neutral rating, the bank signals that investors could be pricing in most of that progress already.
