Coherent vs. UiPath: Which AI Growth Stock Is the Better Buy?

Both Coherent Corp. COHR and UiPath PATH are high-growth companies benefiting from rapid AI adoption across industries. These companies are tied to enterprise and data center spending, driven by AI expansion, enabling them to make direct plays on the same AI investment wave that appeals to investors today.

Let us delve deeper to find out which of these two stocks investors should consider adding to their portfolios.

The Case for COHR

Coherent is capitalizing on the AI wave, as evidenced by more than 70% of its top line coming from the Datacenter & Communications segment during the second quarter of fiscal 2026. Rapid growth of AI is helping COHR pay out dividends as it witnessed an 11% sequential and a 34% year-over-year increase in its revenues in the second quarter of fiscal 2026.

COHR witnessed sequential 40-basis-point (bps) and 147 bps year-over-year rallies in its operating margin, highlighting operational prowess, a vital trait required to grow in the AI market.

COHR’s product portfolio, combined with its vertical integration and U.S. manufacturing expansion, provides a clear competitive edge. Management expects growth of 1.6T and 800-gig transceivers and Optical Circuit Systems to be the primary revenue growth driver. The company champions the expansion of indium phosphide (a vital component of AI infrastructure), backed by 6-inch wafer production across Sherman, Texas and Jarfalla.

The company holds a strong balance sheet position. As of the end of December 2026, COHR holds $899 million in cash against $106 million in current debt. While $3.2 billion in long-term debt attracts high interest expenses, the times interest earned of 2.5X reflects easy payments. In addition to that, the company’s current ratio is at 2.25, higher than the industry average of 1.59, highlighting strong liquidity.

Coherent is positioned as a linchpin of the AI revolution by catering to the AI infrastructure demand. A robust balance sheet, coupled with a strong product pipeline and scalability, creates the perfect blend to feed into the AI demand and convert that momentum into sustainable growth.

The Case for PATH

UiPath derives its edge in automation from the efficiency its platform delivers by turning AI ideas into everyday business efficiency. Rather than fixating on rule-based bots, the company is sliding toward agentic AI agents that can understand intent, work across tasks and adjust within set limits. This pivot makes automation not just a means to cut costs but a vital system that aids how work gets done.

The company focuses on easier adoption, broader usage among consumers and strengthening long-term relationships. Companies that utilize PATH’s services can operate on a single platform rather than separate tools despite AI agents managing workflow across different systems. This supports margin growth without the need for heavy spending to win customers. This business model is at the apex of driving 16% year-over-year growth in revenues in the third quarter of fiscal 2026.

It is really impressive how the company emphasizes AI that is controlled, transparent and auditable. This element of governance provides strength to its offerings, speeding adoption and decision-making. New agents add more value to the overall platform as businesses pivot from simple rules to smarter ones.

Partnerships with Microsoft Azure AI Foundry and OpenAI add to the company’s brand value. Collaboration with Microsoft Azure AI Foundry supports customers to automate end-to-end processes utilizing PATH’s agents interacting with Azure AI Foundry agents and models. PATH announced a partnership with OpenAI to build a ChatGPT connector that integrates OpenAI frontier models with enterprise customer workflow.

While these positives might sway investors toward the company, we must acknowledge the competitive pressure that the company faces. As the line between automation and software diminishes, PATH faces conflict with tech giants, including Microsoft Power Automate and cloud native agents like ServiceNow and Salesforce. Therefore, PATH’s need to invest heightens, which might lead to disrupting growth and profitability balance.

How Do Zacks Estimates Compare for COHR & PATH?

The Zacks Consensus Estimate for Coherent’s fiscal 2026 sales and EPS indicates year-over-year growth of 19.4% and 52.4%, respectively. Eight EPS estimates moved upward over the past 60 days, with no downward revision.

The Zacks Consensus Estimate for UiPath’s fiscal 2026 sales and EPS indicates year-over-year growth of 11.5% and 26.4%, respectively. One EPS estimate moved upward over the past 60 days, with no downward revision.

PATH Trades Cheaper Than COHR

Coherent is currently trading at a forward 12-month P/E ratio of 37.94 times, which is higher than the 12-month median of 26.21 times. UiPath is trading at 13.26 times, substantially lower than the 12-month median of 77.08 times. Coherent appears pricier than PATH.

Verdict: Add COHR to Your Portfolio

We recommend that investors buy Coherent for now, as it has positioned itself to capitalize on the AI infrastructure boom. Its revenue concentration in the Datacenter & Communications segment and a robust product pipeline provide exceptional growth visibility. Coherent is a fundamentally strong stock that displayed significant operational prowess, which justifies its premium valuation, making it a perfect fit for an investor's portfolio.

The intense competition tackled by PATH compels us to recommend a hold for now. While it derives an edge from partnerships, the automation market is dominated by tech giants, making it difficult for the company to maintain a balance between growth and profitability. We suggest investors hop on to a wait-and-see approach due to a softer near-term outlook.

COHR has a Zacks Rank #2 (Buy), while PATH carries a Zacks Rank #3 (Hold). 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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