Coherent (COHR) Is Up 15.5% After 300mm Silicon Carbide Breakthrough For AI Datacenter Efficiency – Has The Bull Case Changed?

• Earlier this month, Coherent Corp. announced a major milestone in its next-generation 300mm silicon carbide platform, aiming to improve energy efficiency and thermal performance in AI datacenter infrastructure while also targeting AR/VR and power electronics applications.
• The shift to 300mm conductive SiC substrates, building on Coherent’s large-diameter materials expertise, could increase device yields per wafer, lower chip costs, and enhance performance across datacenters, immersive wearables, and electrification technologies.
• Next, we’ll explore how Coherent’s 300mm silicon carbide push for AI datacenter efficiency may influence its existing AI-focused investment narrative.

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Coherent Investment Narrative Recap

To own Coherent, you need to believe its role as an enabler of AI datacenters, advanced optics and power electronics can support profitable growth despite cyclicality and capital intensity. The new 300mm silicon carbide platform clearly reinforces the AI and electrification catalyst, but it does not remove key risks around heavy manufacturing investment, demand volatility in silicon carbide and exposure to aggressive pricing in optical components.

The 300mm SiC milestone sits alongside Coherent’s earlier collaboration with NVIDIA on silicon photonics networking for AI datacenter connectivity, underscoring how the company is positioning itself inside the AI infrastructure stack at both the compute and power levels. Together, these moves concentrate the short term catalyst around AI and cloud spending, while heightening the importance of managing capital spend and customer concentration as this exposure grows.

Yet investors should also weigh how heavy manufacturing commitments could amplify any future downturn in silicon carbide demand...

Read the full narrative on Coherent (it's free!)

Coherent's narrative projects $7.7 billion revenue and $732.0 million earnings by 2028.

Uncover how Coherent's forecasts yield a $174.53 fair value, a 12% downside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community span roughly US$54 to US$175 per share, showing how differently investors can view Coherent’s prospects. You can set those views against the AI driven catalyst around datacenter efficiency and consider how it might interact with the company’s ongoing need for large scale manufacturing investment.

Explore 5 other fair value estimates on Coherent - why the stock might be worth as much as $174.53!

Build Your Own Coherent Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Coherent research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Coherent research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Coherent's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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