Goldman Sachs’ Best Phase 2 AI Stocks: Top 24 High Conviction AI Stocks

3. Coherent, Inc. (NYSE:COHR)

Year To Date Share Price Gain: 148.39%

Number of Hedge Fund Investors in Q2 2024: 47

Coherent, Inc. (NYSE:COHR) is a diversified optoelectronics, optical components, and laser company. Its exposure to the data center industry comes via the firm’s optical business which sells optical transceivers and other products for networking applications. The primary reason that Coherent, Inc. (NYSE:COHR)’s stock is up 148% year to date is the fact that it has already started to realize revenue from its data center exposure. During its fiscal Q4, datacom revenue grew by 58% annually and management ascribed the uptick primarily to data center and AI demand driven by the 800G datacom transceiver product lineup. Not one to take it slow, Coherent, Inc. (NYSE:COHR) already has its eye on the future since it has sampled its next generation 1.6T transceiver products. If they are well received, then the firm could see additional tailwinds in 2025. The new transceivers are crucial particularly as their higher prices help firms beef up margins.

NCG Investors mentioned Coherent, Inc. (NYSE:COHR) in its Q2 2024 investor letter. Here is what the fund said:

“Coherent Corp. (NYSE:COHR) is a market leader in engineered materials, optoelectronic components, and lasers for use across various end markets, with attractive growth opportunities in areas such as the data center and electric vehicles. COHR recently hired a new CEO with a track record of enhancing business strategy to deliver consistent revenue growth and margin expansion, and we believe he has the opportunity to do the same at COHR.”