Coherent (COHR)

Optical components + lasers (Coherent) - 800G/1.6T transceivers for AI data-center interconnect, on its own indium phosphide fabs

AI exposure 57% — derived from reported segment revenue, not asserted.

Where it sits

Connectivity → Optical Components & Photonics · figures rebased to Q4 FY2026, reported 2026-08-12

Optical transceivers (800G, 1.6T), DSPs, optical circuit switching… is 79% of revenue, so Optical Components & Photonics is effectively the whole company rather than one leg of it. The rest is tagged separately: Lasers, Directed Energy & Photonics at 13%; Semiconductor Devices at 8%.

Also tagged: emerging in Frontier & Emerging Bets → Lasers, Directed Energy & Photonics; emerging in Silicon Layer → Semiconductor Devices.

Reported segments

• Datacenter & Communications — 79% of revenue
• Industrial — 21% of revenue

Coherent ($2.045B Q4 FY2026, +33.8% YoY; FY2026 $7.118B, +22.5%; Q1 FY2027 guided $2.2-$2.4B). Reports TWO segments from FY2026 after the 1 July 2025 realignment - Datacenter & Communications and Industrial - retiring Networking/Materials/Lasers. Q4 mix: Datacenter & Communications 79.0% ($1.615B, +59% YoY pro forma) = primary B3 Optical Components & Photonics - 800G/1.6T transceivers, DSPs, OCS, ZR/ZR+; Industrial 21.0% (fell $81M) = lasers for precision manufacturing plus engineered materials and SiC, split 13/8 here as an Atlas estimate since Coherent does not disclose it. NVIDIA holds a…

How the 57% is built

• Datacenter & Communications — 79% of revenue × 70% AI-driven (estimate). 800G and 1.6T transceivers for AI clusters drive the segment — it grew 59% YoY pro forma in Q4 FY2026 — but telecom and non-AI cloud optics also sit here, so the share is high rather than total
• Industrial — 21% of revenue × 10% AI-driven (estimate). Lasers for precision manufacturing and engineered materials; only the semiconductor and display capital-equipment optics are AI-linked

Investment read

Moat. Vertically integrated optics, and the integration that matters is indium phosphide: Coherent runs its own InP wafer fabs and is doubling internal output by the end of calendar 2026, a quarter ahead of plan, while Lumentum and Fabrinet buy from outside. Six-inch InP yields more than four times the devices at less than half the cost of three-inch. NVIDIA's $2B equity stake and multi-year co-packaged-optics supply agreement tie that capacity to the dominant roadmap.

Bottleneck / pricing power. Rising pricing power in datacom transceivers, and FY2026 proved it: non-GAAP gross margin reached 40.2% in Q4, up 215bps YoY, and full-year non-GAAP operating margin expanded 262bps to 20.5% - margin widening through a demand surge is not what a price-taker does. Growth is supply-led rather than demand-led, and 1.6T carries a better margin than 800G.

Role in the AI stack. The optical-interconnect (transceiver/laser) layer for AI clusters.

Connected companies

• NVIDIA (NVDA) — COHR supplies: optical transceivers for AI fabric
• Nokia (NOK) — COHR supplies: optical components for transport systems
• Lumentum Holdings (LITE) — COHR competes with: Datacom optical modules + lasers — the two US optical-component majors for AI
• IPG Photonics (IPGP) — COHR competes with: Industrial/fiber lasers — IPG Photonics (fiber laser leader) vs Coherent lasers segment
• Credo Technology (CRDO) — COHR competes with: Adjacent AI-interconnect players — Coherent optics/transceivers vs Credo DSP/copper-cable silicon; overlap mainly at short reach
• MACOM Technology (MTSI) — COHR is supplied by: laser drivers / TIAs / lasers — component supplier into optical-module maker
• ON Semiconductor (ON) — COHR competes with: marginal SiC-substrate-level overlap — Coherent (merchant SiC wafers) vs onsemi (vertically integrated SiC device maker)
• STMicroelectronics (STM) — COHR competes with: marginal SiC-substrate overlap — Coherent (merchant wafers) vs STMicro (vertically integrated SiC device leader)
• Monolithic Power Systems (MPWR) — COHR is supplied by: power management for optical modules/transceivers
• Arista Networks (ANET) — COHR supplies: optical transceivers for Arista (coherent-optics partner)
• Viavi Solutions (VIAV) — COHR competes with: optical filters/coatings/3D-sensing — Viavi vs Coherent (optical components)
• Microsoft (MSFT) — COHR supplies: optical transceivers/components for Microsoft AI networking
• Alphabet (GOOGL) — COHR supplies: optics for Google data-center interconnect
• Meta Platforms (META) — COHR supplies: optics for Meta

Others in Optical Components & Photonics

• Lumentum Holdings (LITE)
• Corning (GLW)
• MACOM Technology (MTSI)
• Credo Technology (CRDO)

All 174 companies · What moved this quarter · How the map is built