Coherent Corp.
Information Technology · Electronic Components
COHR is one of three credible suppliers (with $LITE, Innolight) that can ship 800G/1.6T datacom transceivers at hyperscaler volume - the optical interconnect bottleneck inside AI back-end Clos fabrics. Vertical InP/GaAs fab is the moat: peers buy laser dies on the open market, COHR makes them.
- 800G ramp inflecting through CY26; 1.6T LPO/LRO sampling at $NVDA-aligned customers
- Datacom Networking mix shifted from ~25% to ~45% of revenue post-Coherent merger; gross margin lift as telecom legacy rolls off
- Silicon carbide substrate business (Wolfspeed-adjacent) is optional EV/power upside, not in the AI thesis
- Anchor customer concentration is the bubble: $NVDA reference designs, hyperscaler direct
- Capex-heavy fab build into a cycle where Innolight + $LITE are also adding; transceiver ASP compression risk on 800G as supply catches demand
- ~$4B net debt post-Coherent deal; rates + capex squeeze FCF conversion
- LPO/CPO architecture shift could disintermediate pluggables on a 3-5 year horizon (co-packaged optics moves the laser onto the switch ASIC)
- China telecom exposure + export-control overhang on advanced laser products