In the fourth quarter of 2025, Artisan Mid Cap Fund's investor letter spotlighted Coherent Corp. (COHR) as a significant contributor to its portfolio. Coherent, a prominent provider of laser and photonics technologies for various applications including data centers, industrial uses, and communications, reported impressive financial results. The company's earnings surpassed projections, largely driven by the high demand for high-speed optical components, a sector significantly boosted by advancements in Artificial Intelligence (AI). Furthermore, Coherent demonstrated enhanced profit margins and expressed increased confidence in its vertically integrated indium phosphide platform, which offers both supply chain resilience and a competitive edge in a capacity-constrained market. Despite trimming its position due to the stock's strong performance and valuation nearing the upper end of its assessed range, Artisan Mid Cap Fund maintains conviction in Coherent's long-term growth prospects.
Coherent Corp. (COHR) closed at $248.89 per share on February 23, 2026. The company's shares have experienced a remarkable increase, with a one-month return of 16.30% and a twelve-month surge of 226.93%. This impressive performance has led to a market capitalization of $46.662 billion. The success is largely attributed to its strategic position in supplying critical components for AI-driven data centers, a burgeoning market that continues to expand rapidly.
Artisan Mid Cap Fund's decision to partially reduce its holdings in COHR, despite maintaining a positive long-term outlook, reflects prudent portfolio management. The fund aims to balance capturing gains from strong performing assets with strategic re-evaluation of valuation levels. This approach ensures that while they recognize and capitalize on current market momentum, they also manage potential risks associated with peak valuations.
The company's vertically integrated indium phosphide platform is a key differentiator. This technology not only ensures a stable and flexible supply chain, but also provides a significant competitive advantage in an industry where component availability can often be a bottleneck. This strategic asset allows Coherent to maintain production efficiency and meet the escalating demands from its diverse client base, particularly those in high-growth sectors like AI.
While Coherent Corp. is not among the most widely held stocks by hedge funds according to some databases, its strong fundamentals and market performance suggest it remains an attractive investment. The company's consistent ability to exceed earnings expectations and its strategic focus on high-demand technologies like AI-supporting optical components position it well for sustained future expansion.
Coherent Corp. continues to be a compelling investment narrative, showcasing robust growth and strategic advantages in critical technological domains. Its strong financial performance and strategic positioning in the AI and photonics markets underscore its potential for continued expansion and value creation for investors.