StoneX Initiates Coverage on Lumentum and Coherent

The firm sets buy ratings for both companies as demand for AI data center optical technology continues to grow.

Updated on Oct. 26, 2026 in Stock Picks

Isometric editorial illustration showing a high-density fiber optic transceiver module, representing AI data center hardware. — Investment firm StoneX initiated buy ratings for Lumentum and Coherent, citing robust growth in optical hardware demand for AI-driven data centers. AI Illustration. Upload story photo >

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Investment firm StoneX has initiated coverage on Lumentum Holdings Inc. and Coherent Corp. with buy ratings, citing growing activity in optical technology for artificial intelligence data centers.

Why it matters

The analyst moves reflect the ongoing demand for specialized hardware within AI infrastructure, which is a major driver of growth for the optics sector as data centers scale capacity.

StoneX issued buy ratings alongside price targets of $1,200 for Lumentum Holdings and $425 for Coherent Corp. Lumentum reported $1.01 billion in revenue for its fiscal fourth quarter ending June 27.

The players

StoneX

A financial services firm that provides analysis and brokerage services for institutional and individual clients.

Lumentum Holdings Inc.

A provider of optical and photonic products that facilitate high-speed data transmission and sensing.

Coherent Corp.

A manufacturer of engineered materials and optoelectronic components used in data communications and laser applications.

The details

Lumentum is seeing demand for high-power lasers and external laser source modules, while Coherent currently reports more than 10 customer engagements for both co-packaged and near-packaged optics. These technologies allow for more efficient data transmission within the complex architecture of AI data centers. Coherent specifically anticipates that revenue from its PhotonLink platform will begin to ramp up in the fourth quarter of 2026.

June 27, 2026 marked the conclusion of Lumentum's fiscal fourth quarter.
October 26, 2026 was the date StoneX initiated coverage on the two firms.
The fourth quarter of calendar 2026 is when Coherent expects PhotonLink revenue to ramp.

Money Landscape

Investment in optical technology for AI data centers follows a broader trend of capital allocation toward critical infrastructure hardware. This shift reflects the ongoing scale-up of computational power across the technology sector.

These analyst ratings represent institutional sentiment regarding companies providing hardware for AI growth. Consult a qualified financial professional to determine how investments in individual technology equities fit your long-term portfolio strategy.

The takeaway

The move by StoneX highlights the growing importance of optics as a foundational element of the AI supply chain. Investors monitoring this sector should track upcoming revenue reporting cycles for indicators that projected platform growth is materializing in earnings.