Coherent (COHR) Benefited from Data-Center Demand

Diamond Hill Capital, an investment management company, released its “Select Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Markets rebounded from a sharp downturn at the start of April following the President’s “Liberation Day” tariffs announcement. As measured by the Russell 3000 Index, US stocks rose approximately 11%. Large-cap stocks saw the highest increase this quarter, rising just over 11%, while small-cap and mid-cap stocks gained approximately 8.5% each. The portfolio delivered positive results in the quarter but trailed the Russell 3000 Index. The strategy returned 7.31% (net) vs 10.99% for the index. To get an idea of the fund’s best choices for 2025, check out its top 5 positions.

In its second-quarter 2025 investor letter, Diamond Hill Capital Select Strategy highlighted stocks such as Coherent Corp. (NYSE:COHR). Coherent Corp. (NYSE:COHR) manufactures and distributes engineered materials, optoelectronic components, and devices. The one-month return of Coherent Corp. (NYSE:COHR) was 22.97%, and its shares gained 21.59% of their value over the last 52 weeks. On September 29, 2025, Coherent Corp. (NYSE:COHR) stock closed at $107.97 per share, with a market capitalization of $16.822 billion.

Diamond Hill Capital Select Strategy stated the following regarding Coherent Corp. (NYSE:COHR) in its second quarter 2025 investor letter:

“Among our top individual contributors in Q2 were Regal Rexnord and Coherent. Coherent Corp. (NYSE:COHR), a global leader in materials, networking and lasers for the industrial, communications, electronics and instrumentation markets, is benefiting from rising data-center demand for optical transceivers.”

Coherent (COHR) Rallies 5.77% as Funds Flock to AI Stocks

Coherent Corp. (NYSE:COHR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 66 hedge fund portfolios held Coherent Corp. (NYSE:COHR) at the end of the second quarter, up from 61 in the previous quarter. While we acknowledge the risk and potential of Coherent Corp. (NYSE:COHR) as an investment, our conviction lies in the belief that some 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 Coherent Corp. (NYSE:COHR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Coherent Corp. (NYSE:COHR) and shared the list of best high beta stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.