COHR Stock Draws Upgrade As Marvell’s $115B Lumentum Deal Highlights ‘Value Of Scarce AI Optics’

• According to Northland, the AI Optical Data Center cycle has created over $200B in value over the last three years
• Marvell agreed to acquire Lumentum in an all-stock deal with an implied enterprise value of $115 billion.
• JP Morgan expects optical industry fundamentals to remain solid, with most of its checks indicating strong demand through the end of 2026 and into 2027.

Coherent (COHR) drew an upgrade from Northland on Monday as Marvell Technology's (MRVL) $115 billion agreement to acquire Lumentum (LITE) put the strategic value of optical technology used in artificial intelligence (AI) data centers in focus.

Northland upgraded Coherent to ‘Outperform’ from ‘Market Perform’ while maintaining its $280 price target, according to TheFly. The firm cited a steep pullback in COHR shares and the value of scarce photonics capabilities.

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As of this writing, COHR stock traded 1% higher.

Marvell's $115B Lumentum Deal Puts AI Optics In Focus

Marvell (MRVL) agreed Monday to acquire Lumentum (LITE) in an all-stock transaction with an implied enterprise value of $115 billion, combining its semiconductor and networking technologies with Lumentum's optical components.

Under the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each share held, implying a price of approximately $1,132 per share and a 23.9% premium based on both companies' October 28 closing prices.

The Northland analyst said Marvell's acquisition highlights the value of photonic device capabilities for major AI chip suppliers, alongside computing and networking integrated circuits, per the note cited by TheFly.

Among larger established suppliers such as Lumentum and Coherent, the AI Optical Data Center cycle has created over $200 billion in value over the last three years, the analyst highlighted.

JPMorgan Also Sees Strong Optical Demand

JPMorgan analyst Joseph Cardoso lowered Coherent's price target to $385 from $465 but maintained an ‘Overweight’ rating. The firm expects optical industry fundamentals to remain solid, with most of its checks indicating strong demand through the end of 2026 and into 2027.

Coherent is scheduled to report fiscal first-quarter 2027 results on Wednesday, November 4, after the market closes. The company previously forecast quarterly revenue of $2.2 billion to $2.4 billion and adjusted earnings per share (EPS) of $1.85 to $2.05.

Retail Investors’ Sentiment Around COHR Stock

Retail investors’ sentiment around COHR stock remained in the ‘bearish’ territory on Stocktwits.

So far this year, COHR stock has rallied over 9%. By comparison, the Vanguard Morningstar Mid-Cap Growth ETF (VOT), which holds the stock, has risen just over 2% over the same period.

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