PLTR vs. COHR: Which AI-Driven Tech Stock Has More Upside?

Both Palantir Technologies Inc. PLTR and Coherent Corp. COHR are major players in the AI and data infrastructure space.

Palantir is a leading provider of enterprise-level artificial intelligence software, specializing in data integration, large-scale analytics, machine learning operations, and decision-making platforms. Its core platforms — Palantir Gotham, Foundry, and Artificial Intelligence Platform (AIP) — are specifically built to empower organizations in both government and commercial sectors to harness the power of their data through real-time decision intelligence and AI-driven operations.

Coherent is a critical supplier of optical and semiconductor technologies, with increasing relevance in AI hardware infrastructure. Its products include high-speed optical transceivers, lasers, compound semiconductors, and advanced substrates, all of which are essential for the high-bandwidth, low-latency data transmission required in AI-centric applications such as data centers, autonomous systems and edge computing.

The Case for PLTR

Fueled by its fast-expanding AIP and surging demand from both government and commercial sectors, especially in the United States, PLTR’s growth trajectory looks more promising than ever. In the second quarter of 2025, U.S. commercial revenues surged an eye-popping 93% to $306 million, while U.S. government business rose 53% to $426 million.

AIP enables clients to integrate autonomous AI agents directly into operational workflows, allowing organizations to make decisions faster and improve productivity by magnitudes, not just percentages. While many competitors focus on AI model development, PLTR is excelling in deployment, a crucial differentiator. It offers a turnkey AI solution that’s enterprise-ready from day one.

Palantir’s AIP bootcamps — short, intensive implementation workshops — have played a key role in accelerating adoption. These sessions help clients quickly move from onboarding to deploying AI in production, drastically reducing time-to-value. The feedback has been overwhelmingly positive, with clients appreciating AIP’s user-friendly interface, scalability and immediate business impact.

Thanks to AIP, the total U.S. commercial contract value skyrocketed 222% year over year in the second quarter, while the remaining deal value climbed 145% to $2.79 billion. Customer count also grew 43% year over year, underscoring PLTR’s ability to scale rapidly while maintaining high satisfaction.

The Case for COHR

Coherent reported a 51% increase in revenues for fiscal 2025, with much of the momentum tied to the accelerating buildout of AI infrastructure in the data center and communications markets. The data center segment alone surged 61% for the year, underscoring how the global rush to support generative AI workloads is translating into demand for high-bandwidth optical solutions. The question now is whether the company can maintain this AI-driven momentum.

The ramp of new products remains central to Coherent’s strategy. The company began shipping its 1.6T transceivers in late fiscal 2024, with AI data center operators among the early adopters. These products are expected to contribute materially in fiscal 2026 as hyperscalers scale GPU clusters that demand faster interconnect speeds. Looking further ahead, development of 3.2T transceivers and advances in co-packaged optics are positioning the company to be a critical enabler of next-generation AI infrastructure.

To support these needs, Coherent has expanded its indium phosphide (InP) capacity by 3X year over year and is operating the world’s first 6-inch InP production line. This manufacturing scale not only reduces cost per watt of optical performance but also ensures volume readiness for AI-driven surges in demand.

Beyond transceivers, Coherent is broadening its AI infrastructure portfolio. In the fourth quarter of fiscal 2025, it began shipping Optical Circuit Switches (OCS), a product category gaining traction as AI workloads create unprecedented east-west traffic inside data centers. With the global OCS market projected to witness an 11.6% CAGR from 2025 to 2030, Coherent is positioned to benefit from this critical layer of AI networking.

The company is also leveraging its photonics expertise through a multi-year agreement with Apple for a new generation of Vertical-Cavity Surface-Emitting Laser products, set to begin contributing in the second half of 2026. While not directly tied to data centers, this deal strengthens the company’s U.S. manufacturing base, a strategic advantage as AI ecosystem players increasingly value secure and domestic supply chains.

In communications, revenues rose 42% year over year in the fourth quarter of fiscal 2025 and 23% for the full year. This growth reflects surging adoption of 100G, 400G, and 800G ZR/ZR+ coherent transceivers, which are essential for AI-driven cloud connectivity and edge-to-core data flows. Management expects these products to sustain top-line growth through fiscal 2026 and beyond.

Ultimately, Coherent Corp is not just riding the AI wave; it is building the optical backbone that enables AI at scale. Its leadership in transceivers, indium phosphide manufacturing, and optical switching technologies makes it a pivotal supplier to both hyperscale cloud providers and next-gen consumer applications.

How Do Zacks Estimates Compare for PLTR & COHR?

The Zacks Consensus Estimate for Palantir’s current year sales and EPS indicates year-over-year growth of approximately 46% and 59%, respectively. This indicates a solid performance trajectory, with EPS estimates trending upward over the past 30 days, signaling increased optimism from analysts about Palantir’s continued profitability and operational leverage, particularly as demand for its AI-driven platforms accelerates.

In comparison, Coherent’s current-year sales are projected to grow about 9% year over year, a notable figure though more modest than Palantir’s top-line growth. EPS is expected to rise about 29% year over year. Like Palantir, EPS estimates for Coherent have also been trending higher over the past 30 days, reflecting growing confidence in its earnings recovery, particularly amid the AI-fueled surge in demand for high-speed optical components and data center infrastructure.

Coherent’s Valuation More Attractive Than Palantir

COHR is currently trading at a forward 12-month P/E ratio of 18.93X, which is well below its 12-month median of 28.04X, indicating a potential undervaluation. In contrast, PLTR holds a much higher forward 12-month P/E ratio of 202.65X, though still below its median of 267.56X. While both stocks are trading at a discount to their historical valuations, Coherent appears far more attractively priced from a valuation standpoint.

Why PLTR Wins the AI Growth Battle?

While both PLTR and COHR are critical to the AI ecosystem, Palantir’s explosive revenue growth, surging adoption of its Artificial Intelligence Platform (AIP), and rapidly expanding U.S. commercial contracts give it a stronger near-term upside. PLTR is delivering turnkey AI solutions that enterprises can deploy immediately, a differentiator that fuels customer growth and sticky long-term contracts. Coherent is essential to AI hardware infrastructure and offers attractive valuation, but its growth is steadier and hardware cycle-dependent. For investors seeking outsized AI-driven upside, Palantir’s accelerating software-led momentum makes it the winner.

PLTR and COHR carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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