Coherent, Lumentum rise following Raymond James upgrade on growing AI demand

Shares of Coherent COHR.N and Lumentum LITE.O rise on Mon after Raymond James upgrades both firms to 'strong buy' from 'outperform', citing increased demand amid artificial-intelligence expansion

COHR's shares up 12.6% at $76.84, and LITE's stock up 8.9% to $72.57 in afternoon trading

Concerns over co-packaged optics (CPO) -- which look to integrate optical components directly on a single semiconductor chip to address bandwidth and power challenges -- are overblown and have pressured the stocks recently, Raymond James said in note to clients

Raymond James said total AI and non-AI datacom market is growing, adding that given Nvidia's NVDA.O Blackwell order disclosure, it sees upside to near-term estimates for 800G (gigabits per second) telecom demand

In addition, the analysts said the optical telecom market, which includes wide area networking applications such as data center interconnects, has begun to recover

However, Raymond James cut its PT on COHR to $91 from $110, and lowered PT on LITE to $82 from $96

Last week, COHR announced its CPO collaboration with Nvidia, and LITE said it was selected as the AI poster child's silicon photonics partner

With moves on Mon, COHR's shares still down ~19% YTD, while LITE's shares off ~21% in 2025