We recently published a list of Billionaire Stanley Druckenmiller’s Top 10 Stock Picks. In this article, we are going to take a look at where Coherent Corp. (NYSE:COHR) stands against other stock picks of Billionaire Stanley Druckenmiller.
Druckenmiller on the Fed’s Actions
On November 6, billionaire Stanley Druckenmiller appeared in a podcast, In Good Company, hosted by Nicolai Tangen, CEO of Norges Bank Investment Management. Druckenmiller shared his opinion on the easing cycle and the role of the Fed in the current economic backdrop. He shared that he is primarily keeping a close look at companies and is not seeing any signs of weakness, other than the housing market, that too because of elevated price levels. He also added that for the next 3 to 6 months, he does not expect any economic problems to overshadow the market.
Druckenmiller emphasized that the financial conditions are of more interest to him and that they have been very “loose, looser than they were when the Fed actually started tightening.” He is also particularly interested to see if the market is currently in the “70s rally since 2021” when the inflationary period started, expressing his concerns over inflation moving forward. In addition to inflationary concerns, Druckenmiller is also worried that the Fed had declared victory a tad bit early, lacking confidence in the current market backdrop.
He believes that with a 50 basis point cut, roaring equities, and no material weakness, the market may turn up again. Druckenmiller added that the Fed is “obsessed” with a soft landing and emphasized that “fine-tuning” and “worrying about a soft landing” is not their job. The reason why there is an urgency for a soft landing is because the Fed let the inflation rate jump in the first place, he added. Speaking of the Fed’s actions and forward guidance, Druckenmiller highlighted that the Fed believes that if it changes its due course of action, it may lose credibility, leaving its hands tied.
Stanley Druckenmiller is an American billionaire, investor, and founder of Duquesne Capital, with a net worth of $6.9 billion, as of December 14, 2024. Druckenmiller has made a fortune as a hedge fund manager for 30 big years and now manages money from his family office. He also worked with George Soros until 2000, a renowned investor known for shorting the pound in 1992. He also shares interesting opinions on the money market and the economy. In Q3 2024, Druckenmiller initiated 33 new positions, ending the quarter with a portfolio of $2.95 billion in 13F securities. With that, let’s discuss his top stock picks as of Q3 2024.
Our Methodology
We scanned Duquesne Capital’s Q3 2024 portfolio and picked the fund’s top 13F holdings. Additionally, we’ve also added overall hedge fund sentiment for each stock, as of Q3 2024.
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).
A row of precision industrial lasers in action, cutting the most intricate of shapes.
Coherent Corp. (NYSE:COHR)
Duquesne Capital’s Stake Value: $264,821,000
Number of Hedge Fund Holders: 51
Coherent Corp. (NYSE:COHR) ranks third on our list of the top 10 stock picks of Stanley Druckenmiller. The semiconductor manufacturing company is headquartered in Pennsylvania, United States, and is a leading provider of advanced illumination solutions for 3D sensing applications.
It is no surprise that Coherent Corp. (NYSE:COHR) is part of the AI revolution. In the fiscal first quarter of 2025, the company saw solid financial results, driven by its AI-related datacom transceivers. In the fiscal first quarter alone, the company launched several new products including lasers for silicon photonics, produced cutting-edge industrial fiber lasers, and demonstrated its key datacom transceiver multi-technology at the European Conference on Optical Communications (ECOC’ 24).
Overall, revenue for the quarter reached $1.35 billion, an increase of 28% from the same period in the last fiscal year. Consequently, Coherent Corp. (NYSE:COHR) increased revenue guidance for the fiscal second quarter of 2025, expecting it to reach $1.33-$1.41 billion. Gross margin is also expected to range between 36-38%. Coherent Corp. (NYSE:COHR) is set to benefit from the AI revolution and owns extremely crucial technologies, explaining why 51 hedge funds held stakes in the stock at the end of Q3 2024.
Artisan Partners stated the following regarding Coherent Corp. (NYSE:COHR) in its Q3 2024 investor letter:
“During the quarter, we initiated new GardenSM positions in CBRE Group, Tetra Tech and Coherent Corp. (NYSE:COHR). Coherent is a global leader in engineered materials, optoelectronic components and lasers. The company is experiencing strong AI-related demand for its data center optical networking products, which serves a key industry bottleneck as customers try to optimize the efficiency of their AI investments. We believe this AI exposure and an upturn in its more cyclical segments should lead to meaningful multiyear revenue growth. Meanwhile, we believe its new CEO, whom we know well from our campaign in Lattice Semiconductor, will drive meaningful change in the business, including divesting slow-growth business segments and driving much-needed operational improvements to unlock margin expansion opportunities.”
Overall, COHR ranks 3rd on our list of Billionaire Stanley Druckenmiller’s stock picks. While we acknowledge the potential of COHR to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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.
