We recently published a list of the 11 Most Promising Long-Term Stocks According to Analysts. In this article, we are going to take a look at where Coherent Corp. (NYSE:COHR) stands against other promising long-term stocks.
On March 31, Banrion’s Shana Sissel recently appeared on CNBC’s ‘Power Lunch’ to discuss that buying at lower valuations is favorable for long-term investors. Shana Sissel highlighted that the markets now want transparency, given the persistent volatility that has lasted for a while now. When this clarity is lacking, it becomes difficult for investors and businesses to plan for the long term. This uncertainty has led to soft consumer and CEO confidence, which makes it challenging to develop long-term strategies when key aspects such as industrial policy, business policy, and taxes remain unresolved in the US. Sissel emphasized that until there is more certainty, volatility is likely to persist. She expressed skepticism that any immediate announcements would provide the level of information investors desire, especially because of the administration’s habit of making statements that are later contradicted or revised. However, Sissel pointed out that long-term investors can find attractive buying opportunities if they look beyond the current uncertainty. She noted that the recent drop in valuations for many tech stocks now presents favorable buying opportunities for long-term investors.
Regardless of the short-term fluctuations in policy uncertainty, many tech and security companies still benefit from long-term demand due to trends like the ongoing adoption of AI and the growing need for cybersecurity and infrastructure protection. Even when government decisions are unclear, these sectors are resilient because their products and services address fundamental needs that are unlikely to change with fluctuating market cycles.
Our Methodology
We first sifted through the Finviz stock screener and financial media reports to compile a list of the top stocks with high upside potential of over 40%. We then selected 11 stocks with a 10-year revenue compound annual growth rate of over 20%. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Note: All data was sourced on April 21.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A row of precision industrial lasers in action, cutting the most intricate of shapes.
Coherent Corp. (NYSE:COHR)
10-Year Revenue CAGR: 22.04%
Number of Hedge Fund Holders: 90
Average Upside Potential as of April 21: 90.08%
Coherent Corp. (NYSE:COHR) develops, manufactures, and markets engineered materials, optoelectronic components & devices, and optical & laser systems and subsystems. It operates through three segments: Networking, Materials, and Lasers.
Due to the strong adoption of its 800G transceivers, Coherent Corp. (NYSE:COHR) made record FQ2 2025 datacom revenue. This was a 79% year-over-year increase. To support this growth, indium phosphide production tripled year-over-year. This is a semiconductor material used in lasers and other optoelectronic devices, which is required for high-speed data transmission in applications like AI-driven data centers.
On March 24, Raymond James analyst Simon Leopold upgraded the stock from Outperform to Strong Buy but lowered the price target to $91 from $110 after insights from NVIDIA’s GTC and Corning’s analyst meetings. The firm revised its datacom optical model and forecasted $22.2 billion in AI backend transceiver sales by 2030, with a ~30% annual growth rate. Its 2027 estimate for AI backend revenue increased to $7.5 billion from $7.1 billion.
Diamond Hill Select Strategy stated the following regarding Coherent Corp. (NYSE:COHR) in its Q4 2024 investor letter:
“Among our other top Q4 contributors were Amazon, WESCO and Coherent Corp. (NYSE:COHR). Coherent is a global leader in materials, networking and lasers for the industrial, communications, electronics and instrumentation markets. Demand for optical transceivers used in AI datacenter buildouts has been robust, benefiting Coherent and resulting in higher earnings and new orders which suggest momentum is likely to continue.”
Overall, COHR ranks 3rd on our list of the 11 most promising long-term stocks according to analysts. While we acknowledge the potential of COHR as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than COHR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
