Data Center
Coherent Q4: Data Center Growth Slowing QoQ; Competitive Concerns
Coherent has all of the right products to potentially become a sizable player in AI networking. Primarily, Coherent’s growth story centers around supplying Nvidia with pluggable optical transceivers (400G, 800G, 1.6T) including EML lasers, VSCEL lasers and CW lasers, and emerging CPO technologies for next-generation switches and interconnects. What Coherent must navigate is that other companies also offer optical interconnects, and thus, competition is heightened in the datacom transceivers, silicon photonics, and CW/EML/VSCEL laser space. In terms of fundamentals, Coherent was weak in terms of the company guiding for lower sequential growth in its datacom segment than the prior two quarters. The company’s margins are also coming under pressure, which is the most important line item for a hardware company in terms of investor appetite.
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