Fed’s Powell opens door to potential rate cuts at Jackson Hole
SAXONBURG, Pa. - Coherent Corp. (NYSE: COHR), a $10.2 billion market cap leader in the photonics industry with robust annual revenues of $5.3 billion, has announced the launch of a cutting-edge optical transport technology aimed at significantly enhancing line system capacity while reducing the size and power requirements. According to InvestingPro data, the company has demonstrated strong growth with revenue increasing by 14.6% over the last twelve months. The company’s innovative approach employs a multi-rail transmission method to achieve sublinear scaling of capacity, which is critical for addressing the increasing traffic demands between data centers without exceeding the limitations of current infrastructure.
During the recent OFC 2025 event, Coherent showcased a prototype featuring two independent rails, both capable of C-Band transmission signals, integrated within a single 1RU module. This setup effectively doubles the density compared to existing benchmarks. The demonstration underscored Coherent’s comprehensive suite of solutions, including their proprietary dual-chip high-power uncooled pumps, multi-port high-resolution and high-speed optical channel monitor (OCM), and unique multi-rail dynamic gain equalization (DGE) technology.
These technologies are designed with scalability in mind, with the potential to deliver an eightfold increase in capacity using significantly less space and power than would be required by stacking traditional single-rail systems. With 16 analysts recently revising their earnings estimates upward according to InvestingPro, the market appears optimistic about Coherent’s technological advances. The company maintains a healthy financial position with a current ratio of 2.67, indicating strong ability to meet short-term obligations. Madhu Krishnaswamy, Senior Vice President and General Manager of Coherent’s Telecom Transport Business Unit, stated, "The introduction of our multi-rail technology is a groundbreaking advance in optical transport." He added that this integrated platform is poised to meet the surging bandwidth requirements driven by data center interconnects and AI cluster applications, with plans to double the capacity within the next year.
General product availability is projected for the first half of 2026. Coherent’s breakthrough is expected to resonate with customers across various applications within the industrial, communications, electronics, and instrumentation markets. The company maintains a global presence with facilities for research and development, manufacturing, sales, service, and distribution.
This announcement is based on a press release statement from Coherent Corp. and reflects the company’s efforts to push the envelope in photonics technology and optical transport solutions. Investors looking to dive deeper into Coherent’s financial health and growth prospects can access comprehensive analysis through InvestingPro, which offers exclusive insights and 12 additional ProTips about the company’s performance and valuation metrics. The company’s next earnings report is scheduled for May 13, 2025, which could provide further clarity on the impact of these technological developments.
In other recent news, Coherent Corp. announced the launch of a new 400 Gb/s Differential Electro-absorption Modulated Laser (D-EML), aimed at enhancing data center operations by improving optical networking technology. This product, which will be showcased at the Optical Fiber Communication Conference and Exhibition (OFC) 2025, is designed to address challenges in optical transceiver designs for high-capacity connectivity. Additionally, Coherent plans to divest its epitaxial fabrication facility in Champaign, Illinois, as part of a strategy to streamline its manufacturing operations. The company has not disclosed potential buyers or terms for the sale.
Raymond James recently upgraded Coherent’s stock rating to Strong Buy, while adjusting the price target to $91.00 from $110.00, based on insights from industry events and a revised datacom optical model. The analyst, Simon Leopold, believes that concerns about Co-Packaged Optics (CPO) have been exaggerated and anticipates significant growth in the A.I. backend transceiver market. Coherent also introduced a new embedded Optical Time Domain Reflectometer (eOTDR) for fiber network diagnostics, enhancing real-time monitoring capabilities in data centers and telecom networks. This tool is part of a modular family designed for easy integration into existing systems. These developments underscore Coherent’s ongoing commitment to innovation in the photonics industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.