Coherent (COHR) Gains from AI Infrastructure Investment

Soumya Eswaran

Tue, May 19, 2026 at 10:01 AM EDT 3 min read

Fidelity Investments, an investment management company, recently released its first-quarter 2026 investor letter for “Fidelity Growth Strategies Fund”. A copy of the letter is available to download here. The Fidelity Growth Strategy is a diversified equity strategy aimed at domestic midcap growth stocks. The approach focuses on identifying quality companies that deliver steady above-average growth and can outperform over time. The Fund (Retail Class shares) returned -3.21% in the quarter, outperforming the benchmark Russell Midcap® Growth Index’s -6.35% return. The outperformance was primarily due to industry and stock selection, particularly in the industrials sector. The US stock market started 2026 positively, but declined in late February amid concerns over the viability of artificial intelligence investments and Middle Eastern conflicts. Investors shifted to defensive strategies, favoring stable, large-cap firms, leading to value equities outperforming growth. The fund continues to favor companies with strong competitive moats and growth potential. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Fidelity Growth Strategies Fund highlighted Coherent Corp (NYSE:COHR) as a leading performance contributor. Coherent Corp. (NYSE:COHR) manufactures and markets engineered materials, optoelectronic components and devices, as well as laser systems used across data center, industrial, and communications applications. On May 18, 2026, Coherent Corp. (NYSE:COHR) closed at $362.83 per share. One-month return of Coherent Corp. (NYSE:COHR) was 2.85%, and its shares gained 345.05% over the past 52 weeks. Coherent Corp. (NYSE:COHR) has a market capitalization of $69.09 billion.

Fidelity Growth Strategies Fund stated the following regarding Coherent Corp. (NYSE:COHR) in its Q1 2026 investor letter:

"An out-of-benchmark holding in Coherent (+29%), a technology company that manufactures precision optical components and coatings, was another top contributor. The shares were driven by a surge in AI infrastructure investment and soaring demand for the firm's products in advanced semiconductor manufacturing. On February 4, Coherent announced solid quarterly financial results, including a 33% rise in revenue from its data center and communications segment. On March 23, the company was added to the S&P 500® index, which further boosted the stock."

Coherent Corp. (NYSE:COHR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 109 hedge fund portfolios held Coherent Corp. (NYSE:COHR) at the end of the fourth quarter, up from 78 in the previous quarter. In the third quarter of fiscal 2026, Coherent Corp. (NYSE:COHR) reported revenue of $1.8 billion, an increase of 7% sequentially, and 21% year-over-year, driven by growth in AI data center and communications demand. While we acknowledge the potential of Coherent Corp. (NYSE: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.