20 Industrial Stocks Already Riding the AI Wave

3. Coherent Corp. (NYSE:COHR)

Number of Hedge Fund Holders: 50 

YTD Return as of August 1: 65%

Approximate Percentage Revenue from AI: 34%

Coherent Corp. (NYSE:COHR) develops, manufactures, and markets engineered materials, optoelectronic components, and devices worldwide. The firm has an impressive track record in the optoelectronic market, being a major player in the arena for more than two decades and leading industry revolutions from telecom networks to enterprise data centers to web hyperscalers. It is no surprise that the firm is now a key player in the AI evolution. One of the most important AI products of the firm are 800G transceivers which read and write data at a speed of 800 gigabytes per second, crucial for prompt processing of AI tasks.

In the third quarter earnings call, Chuck Mattera, the CEO of Coherent Corp. (NYSE:COHR), highlighted how the demand for 800G transceivers had led to a 50% sequential increase in non-GAAP earnings per share. He added that the firm expected AI tailwinds to continue to bolster earnings in the fourth quarter and into 2025. AI was mentioned more than ten times in the earrings call of the company, underscoring the importance of the new tech in the present and future business plans.

In its Q2 2024 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Coherent Corp. (NYSE:COHR) was one of them. Here is what the fund said:

“Other top individual contributors in the quarter included Coherent Corp. (NYSE:COHR) and new holding International Paper Company. Coherent is a global leader in materials, networking and lasers for the industrial, communications, electronics and instrumentation markets. The company is benefiting from rapid growth in AI-related transceiver sales. Investors were also seemingly encouraged by Jim Anderson’s hire as the new CEO. Anderson came from Lattice Semiconductor, where he had an excellent track record.”