Lumentum and Coherent shares each rose about 3% in morning trading on October 26, 2026, after StoneX initiated coverage of both optical-networking companies with Buy ratings. Analyst Cody Acree set price targets of $1,200 for Lumentum and $425 for Coherent, citing demand for optical technology in artificial-intelligence data centers.

Lumentum and Coherent outlook centers on optical deployment

Acree’s case for Lumentum includes an earlier potential rollout of near-packaged optics, or NPO, which places optical components close to processing chips. He sees broader deployment arriving in late 2027 and early 2028, sooner than previously expected.

In his assessment, NPO and co-packaged optics could ultimately take similar shares of the market. That is an analyst expectation about future adoption, not a confirmed customer deployment schedule or a reported sales result.

The roughly 3% share gains were morning-trading observations rather than closing returns. StoneX’s ratings and targets provide context for the moves but do not establish how much of either advance the coverage initiation caused.

Coherent’s manufacturing expansion supports the growth case

For Coherent, Acree highlighted expanding production of indium phosphide, a material used in optical components. He cited plans to more than double capacity again by the end of 2027, with facilities in Texas and Sweden supporting expansion and production in Zurich planned for the first half of 2027.

Coherent’s September 21 PhotonLink platform announcement provides operating context: the platform supports both near-packaged and co-packaged optics, and the company said it was expanding six-inch indium phosphide manufacturing capacity. Coherent expected PhotonLink revenue to begin ramping in the fourth quarter of calendar 2026.

Coherent also expects quarterly revenue to exceed $3 billion by the end of fiscal 2027. That remains a forward-looking company expectation, separate from StoneX’s stock-price target and from revenue already earned.

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