We recently published a list of the 13 Best Technology Stocks to Buy for Long-Term Investment. In this article, we are going to take a look at where Coherent Corp. (NYSE:COHR) stands against other tech stocks to buy for long-term investment.
On May 12, Jeff Kilburg of KKM Financial and Dan Ives of Wedbush Securities appeared together on CNBC to discuss AI, cybersecurity, and mega-cap tech, especially as tech stocks soar as the US-China tariff deal boosts market confidence. Jeff Kilburg first identified the tech software sector as the primary beneficiary of the recent market pause amid optimism and gains, and highlighted that markets are broadly positive. He noted that many investors underestimated how quickly a China trade deal would materialize and contrasted it with the UK deal, which was expected to be a slower, tentative template. Kilburg suggests that faster deal-making could continue and benefit several software companies, which have been overlooked due to the focus on the MAG7. Dan Ives concurred with Kilburg’s view but singled out NVIDIA as the biggest near-to-medium-term beneficiary of the pause, especially given its prior exposure to China tariffs. He referenced the ongoing AI revolution and the surge in AI-related stocks and described the current environment as a dream scenario for tech investors. Ives anticipates new highs for tech and the broader market. He also described a ‘golden age’ for cybersecurity stocks, which are acting as secondary beneficiaries of AI growth.
On a question about the impact of the admin’s focus on reducing federal spending and debt, particularly on companies that derive substantial revenue from government contracts, Kilburg responded that this fiscal discipline is actually positive for software companies as it may drive more spending toward efficient software solutions. Kilburg also addressed the sectors to avoid or be cautious about amid the current market environment. He suggests trimming utilities, which have been a safe haven but may now be less attractive. He points out that the VIX volatility index dropping below 20, which is a big change from over 60 in April, indicates reduced market fear and increased investor confidence. This suggests a market environment favoring higher-beta and growth-oriented investments rather than defensive plays.
Our Methodology
We first sifted through stock screeners, ETFs, and financial media reports to compile a list of the top tech stocks that have grown over 15% in the past 3 years. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 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 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)
3-Year Revenue CAGR: 20.00%
Number of Hedge Fund Holders: 71
Coherent Corp. (NYSE:COHR) develops, manufactures, and markets engineered materials, optoelectronic components & devices, and optical & laser systems & subsystems. These are used in industrial, communications, electronics, and instrumentation markets. The company also benefits from the demand for AI-related components like optical transceivers, which are required by data centers.
On May 8, B. Riley analyst Dave Kang lowered the firm’s price target on Coherent to $77 from $95 with a Neutral rating following the company’s FQ3 2025 report, where the revenue increased by 24% year-over-year to a record $1.5 billion. The Networking revenue in particular surged by 45% year-over-year due to the booming AI data center market, which itself achieved record Q3 revenue with 54% growth. However, the reduced price target reflects the contraction of the optical group in recent months.
To support the demand for optical networking solutions, Coherent Corp. (NYSE:COHR) is expanding its in-house indium phosphide capacity, which grew by ~3x year-over-year in FQ3. The company is ramping volume production on its new 6-inch indium phosphide platform next quarter. Coherent is also advancing its new data center Optical Circuit Switch/OCS platform, which will expand the company’s addressable market.
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 10th on our list of the best technology stocks to buy for long-term investment. While we acknowledge the growth potential of COHR, 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 this 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.
