BofA Hikes Coherent Price Target to $400 on AI Data Center Boom

Bank of America raised its price target for Coherent (NYSE: COHR) to $400 from $365, while maintaining a Neutral rating. The revision comes after the bank increased its calendar 2030 total addressable market (TAM) for AI data center systems to approximately $1.7 trillion, up from $1.4 trillion.

Rating Change

• Previous Price Target: $365
• New Price Target: $400
• Rating: Neutral (unchanged)

Analyst Rationale

BofA analysts believe the accelerating spending on AI infrastructure, particularly data centers, will benefit companies like Coherent that supply optical components and semiconductors essential for these facilities. The $300 billion TAM increase reflects higher long-term demand expectations.

Context

The adjustment coincides with a strong performance in the AI sector, with stocks like NVIDIA (NVDA) rising sharply. Other analysts, including those at Morgan Stanley and Goldman Sachs, have also raised their AI market estimates, boosting sector confidence. Coherent shares have gained about 12% over the past month.

What to Make of It

The price target hike reflects growing optimism in the AI space, but the Neutral rating suggests the stock may be fairly valued at current levels. Investors should monitor actual demand trends and the company's earnings before making decisions.