We recently published a list of Top 10 Hottest AI Stocks According to Latest Analyst Ratings and News. With Coherent Corp (NYSE:COHR) ranking 9th on the list, the company deserves a closer look.
AI stocks have declined significantly in recent weeks and analysts believe this is exactly the healthy correction long-term investors have been waiting for. According to Bloomberg, Rob Sluymer, technical strategist at RBC Wealth Management, said AI stocks have stabilized at a level they can hold for the rest of the year. The analyst said technical indicators now show that AI stocks have moved from overbought to oversold territory.
“After the positions have been settled, traders have the opportunity to take positions,” Sluymer is said to have said.
Many others agree with Sluymer. Wedbush’s Dan Ives reiterated his view that we are still in the early stages of the AI bull market on a recent CNBC show.
“If you look at what we’ve seen from the AI revolution to broader technology, it’s been strong from a yield perspective. And the fear of growth that we’ve seen is just one obstacle on the way to what I think is the fourth industrial revolution,” Ives said.
For this article, we’ve selected 10 AI stocks that are making waves based on recent earnings, analyst ratings, or important industry news. For each company, we’ve mentioned the number of hedge fund investors. Why do we care about the stocks hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (Further details can be found here).
National Cancer Institute – Jg89tuvB1iQ – Unsplash
Coherent Corp (NYSE:COHR)
Number of hedge fund investors: 47
Coherent Corp (NYSE:COHR) is trending as investors pay attention to this relatively new entrant in the list of popular AI semiconductor stocks. The company recently reported strong quarterly results and provided an optimistic forecast. Earlier this month, BofA upgraded the stock from Neutral to Buy, citing the potential for improved execution and growth in the AI optics market. BofA also increased its price target on the stock from $65 to $75.
Coherent Corp (NYSE:COHR) makes optical materials and semiconductors. Its laser technology is used for laser welding of EV batteries and for UV lasers in the mobile and high-end TV display industries. But the spotlight is currently on the communications segment, which is expected to benefit from the expansion of cloud computing, AI and machine learning. This segment, driven by demand for higher-throughput datacom transceivers, last accounted for 52% of Coherent Corp (NYSE:COHR)’s market and grew double-digit year-over-year, particularly in North America and China.
Giverny Capital Asset Management stated the following regarding Coherent Corp. (NYSE:COHR) in its Investor letter Q2 2024:
“Because I like the portfolio, we had very few transactions in the quarter. I got out Coherent Corp. (NYSE:COHR) because I became convinced that the company had an exceptional collection of assets but a far less impressive management culture. Coherent’s CEO and CFO both recently left their jobs, and perhaps I should have given their successors time to chart a new course. I used the proceeds from the sale to add to Five Below and Kinsale Capital. In the short term, Coherent is up and Five Below is down, so the early returns from this swap are not encouraging.”
Overall, Coherent Corp (NYSE:COHR) ranks 9th on Insider Monkey’s list of the title Top 10 Hottest AI Stocks According to Latest Analyst Ratings and News. While we recognize the potential of Coherent Corp (NYSE:COHR), we believe AI stocks promise higher returns and do so in a shorter period of time. If you’re looking for an AI stock that’s more promising than COHR but worth less than five times its earnings, read our report on the cheapest AI stock.
READ MORE: Analyst sees a new $25 billion “opportunity” for NVIDIA And Jim Cramer recommends these stocks.
Disclosure: None. This article was originally published on Insider Monkey.
