Mark Western

The current Coherent was created through the $7 billion merger of II-VI Incorporated and the legacy Coherent company, combining complementary capabilities in optical communications, laser technology, and semiconductor materials. Coherent has emerged as one of the biggest beneficiaries of the AI datacenter buildout. The company's optical transceivers — devices that convert electrical signals to light for high-speed data transmission over fiber optic cables — are essential components in the massive datacenters being built by hyperscalers (Microsoft, Google, Amazon, Meta) to train and run AI models. As AI clusters require ever-higher bandwidth interconnects, demand for Coherent's 800G and next-generation 1.6T transceivers has surged. Beyond datacenters, Coherent produces silicon carbide (SiC) substrates used in power electronics for electric vehicles, industrial lasers for materials processing, and specialty materials for aerospace and defense applications. Key stock drivers include AI datacenter capital expenditure trends, optical transceiver pricing and volumes, silicon carbide market growth, EV adoption rates, post-merger integration execution, and the competitive dynamics with Lumentum, Broadcom (optical), and Wolfspeed (SiC).