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On Tuesday, analysts at JPMorgan and Needham & Company released positive notes on COHR, stating AI will drive the stock’s bull case.
However, Rosenblatt analysts said that with COHR up ~80% in the past month on the thesis that AI will drive massive growth in 800G and above Datacom Optical modules, they believe the “bull thesis and stock are ahead of themselves.”
At the time of writing, Coherent shares are down more than 6% premarket.
“AI Pods are currently predominately closed with most equipment, including networking, supplied by major chip makers” such as Nvidia (NASDAQ:NVDA) and Marvell (NASDAQ:MRVL), the analysts stated.
“We believe COHR will benefit from AI when the pods open and Ethernet is more widely deployed starting in 2HCY24. However, in the near-term, we are concerned about further shoes to drop in Networking, primarily due to high Telecom inventories, and Lasers, due to macro and competition.”
Rosenblatt is “much more cautious” on COHR now, with the stock at ~15x consensus FY25 EPS.
