Street Calls of the Week
Investing.com - Raymond James sees significant upside potential for Coherent (COHR), Lumentum, and Applied OptoElectronics as it updates its AI and optical transceiver forecasts to reflect stronger AI capital expenditure investment. Coherent , currently trading above its InvestingPro Fair Value, has shown remarkable momentum with a 65% surge over the past six months and maintains strong revenue growth of 23.4% year-over-year.
The investment firm has substantially increased its proprietary AI transceiver model forecasts, now projecting $15.2 billion in sales for 2025, representing 56% year-over-year growth over 2024, which itself had already doubled. The long-term outlook appears even more robust, with 2030 estimates reaching $98 billion, representing a 45% five-year compound annual growth rate. With Coherent’s strong financial health indicators and 10 analysts recently revising earnings upward, InvestingPro subscribers can access 13 additional key insights about the company’s potential.
Raymond James specifically noted that its pluggable transceiver forecast for 2025/2026 increased approximately 50% to $15.3 billion/$19.5 billion compared to its previous model, while its 2030 forecast rose to $37 billion from $26 billion previously.
The firm’s updated model now incorporates scale-up co-packaged optics (CPO), which dramatically expands its out-year estimates. CPO component assumptions have increased to over $60 billion in 2030 from just $4 billion when the firm only modeled scale-out.
The forecast revision reflects better Blackwell/Accelerator shipments, faster-than-expected progress from Taiwan Semiconductor on co-packaged optics solutions, and the expectation that Nvidia will move to embed COUPE into its Feynman architecture and beyond, triggering material acceleration in 2029 and 2030.
In other recent news, Coherent Corp. announced the shipment of its 50 millionth thin-film filter from its Advanced Coating Center in Santa Rosa, California. This milestone underscores the company’s long-standing presence in optical innovation, with applications in telecommunications and life sciences. Coherent also introduced two new laser welding products: the WELD1D+ laser welding processing head and the WELD2D MP laser welding scanner. The WELD1D+ features integrated software control, while the WELD2D MP targets the electric vehicle and electronics markets. Additionally, Coherent’s Chief Technology Officer, Dr. Julie Sheridan Eng, was honored with the 2025 Dr. Lisa Su Woman of Innovation Award by the Global Semiconductor Alliance. The company has joined the STARFIRE Hub, a collaborative effort led by Lawrence Livermore National Laboratory, to advance diode technology for fusion energy. Coherent will lend its expertise in high-power diode technology to this initiative. These developments reflect Coherent’s ongoing contributions to various technological sectors.
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