Analyst rethinks under-the-radar stock backed by Nvidia

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(COHR), as it looks to strengthen supply chains needed for the massive buildout of AI infrastructure.Both companies develop optical technologies that use light to transmit data or perform sensing functions. Faster data transit is critical for running AI models.Nvidia is also making multi-billion-dollar purchase commitments with each company.“Together with Lumentum, NVIDIA is advancing the world’s most sophisticated silicon photonics to build the next generation of gigawatt-scale AI factories,” Nvidia CEO Jensen Huangsaid in a statement.Investors have already pushed the stocks sharply higher. Lumentum shares have surged about 76% year-to-date and are nearly 10x higher over the past 12 months as of March 5.Coherent stock has gained about 37.5% this year and is up roughly 250% over the past 12 months.Nvidia stock is down year-to-date.Getty Images · Getty ImagesAnalysts sharply lifted their price targets on Lumentum following the news of Nvidia’s investment.Rosenblatt analyst Mike Genovese raised his price target on the stock to $900 from $580 and maintained a buy rating, The Fly reported.Related: Morgan Stanley changes its Nvidia position for the rest of 2026The firm said the deal appears to be driven by demand for co-packaged optics (CPO), a technology that moves data more efficiently within AI data centers. Rosenblatt also pointed to stronger long-term earnings potential.Stifel analyst Ruben Roy increased his price target for Lumentum stock to $800 from $480, while reiterating a buy rating.After recent meetings with CEO Michael Hurlston following the company’s fiscal second-quarter results, the analyst is raising what he called the “admittedly conservative estimates.”On Feb. 3, Lumentum reported strong fiscal second-quarter results, with revenue rising 65.5% year over year to $665.5 million. Non-GAAP earnings came in at $1.67 per share, sharply higher than 42 cents a year earlier, up 298%.Nvidia's investment in the two optical tech companies is "driven by the physical limits of copper interconnects at the data rates AI clusters now demand," Brendan Burke, research director of Futurum, said in a note.Burke said traditional copper links are impractical for the 800 Gbps speeds required in modern AI fabrics. As copper reaches its limit at higher frequencies, the optical transition is "mandatory."Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,740.02 -90.69 (-1.33%)Dow 3047,501.55 -453.19 (-0.95%)Nasdaq22,387.68 -361.31 (-1.59%)Russell 20002,525.30 -60.27 (-2.33%)VIX29.49 +5.74 (+24.17%)Gold5,158.70 +80.00 (+1.58%)Trending tickersBTC-USD Bitcoin USD 67,346.11 -860.46 (-1.26%)HIMS Hims & Hers Health, Inc. 15.74 -0.14 (-0.88%)ETH-USD Ethereum USD 1,970.56 -8.24 (-0.42%)XRP-USD XRP USD 1.36 -0.01 (-0.77%)BTC-CAD Bitcoin CAD 91,439.18 -1,168.29 (-1.26%)PortfolioSign in to access your portfolioSign inTop gainersDAWN Day One Biopharmaceuticals, Inc. 21.20 +8.42 (+65.88%)IOT Samsara Inc. 35.36 +5.78 (+19.54%)MRVL Marvell Technology, Inc. 89.57 +13.89 (+18.35%)EMAT Evolution Metals & Technologies Corp. 9.76 +1.25 (+14.69%)IOVA Iovance Biotherapeutics, Inc. 5.13 +0.55 (+12.01%)Top losersINGM Ingram Micro Holding Corporation 22.06 -4.30 (-16.31%)BE Bloom Energy Corporation 135.19 -24.80 (-15.50%)GAP The Gap, Inc. 23.28 -3.92 (-14.41%)LITE Lumentum Holdings Inc. 558.44 -92.38 (-14.19%)JEF Jefferies Financial Group Inc. 38.29 -5.99 (-13.53%)Most activeNVDA NVIDIA Corporation 177.82 -5.52 (-3.01%)ONDS Ondas Inc. 9.83 -0.63 (-6.05%)AAL American Airlines Group Inc. 11.18 -0.61 (-5.17%)MRVL Marvell Technology, Inc. 89.57 +13.89 (+18.35%)BBD Banco Bradesco S.A. 3.6800 -0.0600 (-1.60%)Top economic eventsEarnings eventsMy earnings eventsEarnings events