Coherent Corp. (COHR) Slid on Weaker Than Expected Guidance

Fidelity Investments, an investment management company, recently released its “Fidelity Growth Strategies Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fidelity Growth Strategies Fund is a diversified domestic equity strategy with a focus on mid-cap growth investments. The fund focuses on investing in high-quality companies that demonstrate consistent growth and generate positive free cash flow. The fund’s Retail Class shares returned -8.03% in the first quarter, underperforming the -7.12% return of the benchmark Russell Midcap Growth Index. U.S. mid-cap growth stocks rose in January but then fell in February and March as post-election optimism was replaced by concern over executive actions, government disruptions, and rising uncertainty about trade and tariffs. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Fidelity Growth Strategies Fund highlighted stocks such as Coherent Corp. (NYSE:COHR). Coherent Corp. (NYSE:COHR) manufactures and distributes engineered materials and optoelectronic components and devices. The one-month return of Coherent Corp. (NYSE:COHR) was 8.24%, and its shares gained 19.63% of their value over the last 52 weeks. On July 1, 2025, Coherent Corp. (NYSE:COHR) stock closed at $88.36 per share, with a market capitalization of $13.735 billion.

Fidelity Growth Strategies Fund stated the following regarding Coherent Corp. (NYSE:COHR) in its Q1 2025 investor letter:

“The fund’s underperformance of the Russell benchmark came from both stock picking and industry selection, with our choices in industrials hurting most. Among individual stocks, a non-benchmark holding in Coherent Corp. (NYSE:COHR) (-33%) was the biggest detractor. The company manufactures networking and laser equipment for the industrial and electronics markets. In early February, Coherent reported Q4 2024 financial results that exceeded expectations, but its forward guidance came in substantially weaker than anticipated. This caused the shares to fall in February and March. We reduced the stake, but the stock remained a top 10 overweight as of March 31.”

Coherent Corp. (NYSE:COHR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held Coherent Corp. (NYSE:COHR) at the end of the first quarter, which was 71 in the previous quarter. In the fiscal third quarter of 2025, Coherent Corp. (NYSE:COHR) reported revenue of $1.5 billion, an increase of approximately 4% sequentially and 24% year-over-year. While we acknowledge the potential of Coherent Corp. (NYSE:COHR) as an investment, 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Coherent Corp. (NYSE:COHR) and shared billionaire Stan Druckenmiller’s stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of COHR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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