Better-Than-Expected Results Lifted Coherent (COHR) in Q4

Fidelity Investments, an investment management company, recently released its “Fidelity Growth Strategies Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fidelity Growth Strategy is a diversified equity strategy aimed at domestic midcap growth stocks. The approach focuses on identifying quality companies that deliver steady above-average growth and can outperform over time. The Fund (Retail Class shares) returned -3.44% in the quarter compared to the benchmark Russell Midcap® Growth Index’s -3.70% return. In Q4, the U.S. stock market continued its rapid rebound, driven by robust corporate fundamentals and strong spending on artificial intelligence. Mid-cap growth stocks underperformed, while large-cap stocks gained mainly from a narrow group of companies connected to generative AI, and small-cap equities benefited from interest rate sensitivity. As 2026 begins, the firm believes the business cycles in the U.S. and globally remain positive. The Strategy remains focused on companies possessing durable competitive advantages and growth potential. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Fidelity Growth Strategies Fund highlighted Coherent Corp. (NYSE:COHR) as one of the leading contributors. Coherent Corp. (NYSE:COHR) is a US-based technology company that manufactures engineered materials, optoelectronic components and devices, and laser systems. On February 4, 2026, Coherent Corp. (NYSE:COHR) stock closed at $211.00 per share. Coherent Corp. (NYSE:COHR) delivered a 21.86% return in the past month, and its shares are up 110.03% over the past twelve months. Coherent Corp. (NYSE:COHR) has a market capitalization of $33.159 billion.

Fidelity Growth Strategies Fund stated the following regarding Coherent Corp. (NYSE:COHR) in its fourth quarter 2025 investor letter:

"Among individual stocks, non-benchmark stakes in tech hardware maker Coherent Corp. (NYSE:COHR) (+71%) and capital goods firm ATI (+41%) were the top contributors. Coherent manufactures precision optical components and coatings. In early November, the company reported quarterly results that significantly exceeded consensus expectations, driven by a surge in AI infrastructure investment and soaring demand for the firm's products in advanced semiconductor manufacturing. To concentrate on that business, Coherent recently sold its aerospace and defense division to Advent for $400 million."

Coherent Corp. (NYSE:COHR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 78 hedge fund portfolios held Coherent Corp. (NYSE:COHR) at the end of the third quarter, up from 66 in the previous quarter. While we acknowledge the potential of Coherent Corp. (NYSE:COHR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Coherent Corp. (NYSE:COHR) and shared a list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.