We recently published a list of Top 10 Trending AI Stocks on Latest Analyst Ratings and News. Since Coherent Corp (NYSE:COHR) ranks 9th on the list, it deserves a deeper look.
AI stocks have pulled back considerably over the past few weeks and analysts believe this is exactly the healthy correction long-term investors were looking for. According to Bloomberg, Rob Sluymer, technical strategist at RBC Wealth Management, said that AI stocks have stabilized at levels they can sustain for the rest of the year. The analyst said technical indicators now show AI stocks have gone from overbought to oversold territory.
“Now that positions have been unwound, there’s an opportunity for traders to take positions,” Sluymer reportedly said.
Many others agree with Sluymer. Dan Ives of Wedbush reiterated his view that we are still in the early stages of the AI bull market in a latest program on CNBC.
“If you look at what we’ve seen from AI revolution to broader tech, it’s been strong from an earnings perspective. And the growth scare that we saw, it’s just a bump in the road to what I believe is the fourth industrial revolution playing out,” Ives said.
For this article, we picked up 10 AI stocks that are making waves on the back of latest earnings, analyst ratings or important industry news. With each company, we have mentioned the number of hedge fund investors. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Coherent Corp (NYSE:COHR)
Number of Hedge Fund Investors: 47
Coherent Corp (NYSE:COHR) is trending as investors pay attention to this relatively new entrant in the list of popular AI semiconductor stocks. The company recently posted strong quarterly results and gave an upbeat guidance. Earlier this month, BofA upgraded the stock to Buy from Neutral citing potential for improved execution and AI optical market growth. BofA also increased its price target for the stock to $75 from $65.
Coherent Corp (NYSE:COHR) makes optical materials and semiconductors. Its laser tech is used for laser welding for EV batteries and for UV lasers in mobile and high-end TV display industries. However, the spotlight is currently on its Communications segment, which is set to benefit from the expansion of cloud computing, AI, and machine learning. This segment, driven by the demand for datacom transceivers that handle higher data throughput, accounted for 52% of Coherent Corp (NYSE:COHR) recent market and grew by double digits year-over-year, particularly in North America and China.
Giverny Capital Asset Management stated the following regarding Coherent Corp. (NYSE:COHR) in its Q2 2024 investor letter:
“Because I like the portfolio, we had very few transactions during the quarter. I exited Coherent Corp. (NYSE:COHR) as I came to believe the company has an exceptional collection of assets but a much less impressive management culture. The CEO and CFO of Coherent both left their jobs recently, and perhaps I should have given their replacements time to set a new course. I used the proceeds from the sale to add to Five Below and Kinsale Capital. In the short run, Coherent is up and Five Below is down, so the early returns on this swap are not encouraging.”
Overall, Coherent Corp (NYSE:COHR) ranks 9th on Insider Monkey’s list titled Top 10 Trending AI Stocks on Latest Analyst Ratings and News. While we acknowledge the potential of Coherent Corp (NYSE:COHR), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.
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Disclosure: None. This article is originally published at Insider Monkey.
