Rosenblatt Raises Coherent (COHR) Target After Its Data Center Revenue Surges 40% Year Over Year

Coherent Corp (NYSE:COHR) is one of the best optical networking stocks to buy according to analysts. On May 7, Rosenblatt raised its price target on Coherent Corp. (NYSE:COHR) from $375 to $425, while keeping its Buy rating intact. The firm is confident in Coherent’s near-to-medium-term earnings trajectory.

Rosenblatt updated its model following Coherent’s Q3 FY2026 earnings report on May 6. In the report, Coherent’s quarterly income came in at $1.81 billion, a 21% year over year increase and 7% higher than in Q2 FY2026. CEO Jim Anderson pointed out in the earnings call that the revenue growth was primarily due to AI data center buildout. In fact, the company’s Data Center & Communications segment, which was responsible for 75% of total revenue, grew over 40% year over year during the quarter, Anderson noted.

The quarter’s non-GAAP EPS was $1.41, a 55% year over year jump, and well ahead of the $1.39 forecast. Management attributed the blowout EPS performance to the 21% top-line revenue growth that flowed through a leaner cost base, gross margin expansion, and lower interest burden.

Besides the impressive Q3 performance, Rosenblatt views Coherent’s move to ramp up production of epitaxial modulated lasers on larger 6-inch wafers as key growth catalyst. The firm believes this manufacturing shift will directly translate into stronger transceiver sales and fatter gross margins in the current quarter, Q4 FY2026.

Coherent Corp (NYSE:COHR) is an optical networking and photonics company. It designs and manufactures advanced laser and optical components used in fiber-optic communications systems.

READ NEXT: 10 Most Buzzing AI Semiconductor Stocks to Buy in 2026 and 11 Best Medical Technology Stocks to Buy Right Now.

Disclosure: None. Follow Insider Monkey on Google News.