Wall Street Backs Coherent, Rocket Lab and Vertiv
Wall Street Backs Coherent, Rocket Lab and Vertiv
Dr. Robert Castellano Thu, October 1, 2026 at 11:58 PM UTC
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Anggalih Prasetya / Shutterstock.comBernstein, Citi, and Wells Fargo all launched bullish coverage on Coherent, Rocket Lab, and Vertiv within weeks of each other, but the real question is whether the commercial developments driving those calls can actually deliver the returns analysts are projecting.Quick Read -
Bernstein targets Coherent at $350, Citi targets Rocket Lab at $105, and Wells Fargo targets Vertiv at $340 in new bullish initiations.
Synspective's 20 additional Electron launches bring its total contracted Rocket Lab missions to 47, scheduled annually from 2028 through 2031.
Vertiv's Q2 revenue rose 24% to $3.3 billion while adjusted EPS jumped 60%, proving AI infrastructure demand already generates strong earnings.
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Coherent’s new optics platform could increase the amount of revenue it captures from each AI infrastructure deployment.
Rocket Lab’s largest commercial Electron order demonstrates the value customers place on dedicated satellite launches.
Vertiv’s power and cooling business already generates substantial earnings, while its planned microgrid acquisition expands its opportunity.
Why Wall Street Is Revisiting These Three Companies
Banks have been busy issuing bullish calls on companies I have analyzed, including Coherent (NYSE: COHR), Rocket Lab (NASDAQ: RKLB), and Vertiv (NYSE: VRT). Bernstein initiated Coherent with an Outperform rating and a $350 price target, Citi initiated Rocket Lab with a Buy rating and a $105 target, and Wells Fargo initiated Vertiv at Overweight with a $340 target. These are new coverage decisions rather than upgrades to existing ratings, but they raise the same investment question: what do the analysts see that could support further appreciation?
The connection among these companies is more useful than their presence on a list of analyst recommendations. Each supplies something customers need to expand their operations. Coherent addresses the movement of information through AI systems, Rocket Lab provides dedicated access to satellite orbits, and Vertiv supplies the power and cooling infrastructure required to operate data centers. Customers purchase these capabilities because their own investments cannot function effectively without them.
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For investors, the important distinction is how each company turns that requirement into additional revenue and earnings. Coherent is seeking to supply a larger portion of an optical connection, Rocket Lab is securing repeat orders for a specialized launch service, and Vertiv is expanding the infrastructure it can supply and service at each data center. Those mechanisms provide a more useful basis for evaluating the stocks than treating every favorable analyst call as an equivalent buying signal.
What the Analyst Targets Actually Tell Investors
Bernstein analyst Daniel Zhu’s $350 target for Coherent implies approximately 9.7% upside from the October 1 closing price of $319.19 provided for this article. Citi analyst John Godyn’s $105 target for Rocket Lab implies approximately 49.0% upside from the supplied $70.46 close. The roughly 51% figure circulated with Rocket Lab’s initiation used an earlier share-price reference.
Wells Fargo analyst Stephen Tusa initiated Vertiv coverage on September 24 with an Overweight rating and a $340 target. His argument centered on its data center exposure, the opportunity to supply more equipment within each deployment, and the addition of services that can support margins and earnings.
According to Table 1, all three analysts assigned favorable ratings, but the targets address businesses with different commercial opportunities and execution requirements. A price target expresses an analyst’s valuation judgment; it does not show how much future growth is already incorporated into the market price or establish the probability of realizing the projected return.
Table 1. New Bullish Analyst Coverage and the Business Opportunity
Metric
Coherent
Rocket Lab
Vertiv
Stock symbol
Research firm
Bernstein
Citi
Wells Fargo
Analyst
Daniel Zhu
John Godyn
Stephen Tusa
Coverage action
Initiated at Outperform
Initiated at Buy
Initiated at Overweight
Price target
$350
$105
$340
Business opportunity examined in this article
Integrated optical connections for AI systems
Repeat dedicated launches for satellite constellations
Power, cooling, and broader data center infrastructure
Source: The Information Network compilation and analysis.
Coherent’s sharp rally has already narrowed the gap to Bernstein’s target, making the performance of its new platform especially relevant. Rocket Lab’s larger indicated upside places greater weight on the execution of future growth opportunities. Vertiv offers a different comparison because its infrastructure expansion is already reflected in substantial reported revenue and profits. The three targets should therefore be evaluated alongside the evidence supporting each business.
Coherent: A Larger Role in Each Optical Connection
In my August 26, 2026, 24/7 Wall St. article, “SK Hynix Just Expanded Coherent’s AI Upside,” I examined how optical connectivity moving closer to processors and memory could broaden Coherent’s opportunity. PhotonLink gives investors a concrete commercial development to evaluate against that thesis. The platform combines optical technologies with assembly and testing capabilities to deliver integrated solutions for AI infrastructure. Its commercial importance extends beyond an increase in demand for individual lasers or detectors: Coherent is seeking to supply more of the connection that makes those components useful.
As AI systems expand, information must move efficiently among increasingly powerful processors and switches. Adding processing capacity does not resolve every performance limitation if connections cannot deliver the required bandwidth within acceptable power limits. Moving optical connectivity closer to computing and switching silicon creates opportunities for suppliers that can integrate the necessary components reliably.
PhotonLink supports co-packaged optics, where optical engines share a package with switching or computing silicon, and near-packaged optics, where they are positioned nearby. The platform also addresses emerging connections between chips. Coherent’s participation across these approaches broadens its opportunity as customers choose different system architectures.
The company has disclosed more than ten engagements in co-packaged optics, more than ten in near-packaged optics, and more than five in chip-to-chip connectivity. It also reports anchor customers and long-term agreements for both co-packaged and near-packaged architectures. These figures indicate commercial activity across multiple approaches, although engagements can overlap and should not be treated as a count of unique customers or guaranteed production orders.
My view is that the larger investment opportunity lies in how much of each optical deployment Coherent can supply. A customer integrating lasers, fibers, precision optics, and detectors from separate vendors must make those technologies work together. Coherent’s combined offering could simplify that task and increase the revenue available from a successful design. The company has not disclosed enough pricing or margin information to quantify that potential improvement.
Coherent is building from an established manufacturing base, with cumulative shipments exceeding 300 million indium phosphide lasers and one billion indium phosphide and gallium arsenide photodetectors. These are historical component shipments rather than PhotonLink sales, but they demonstrate experience producing critical technologies at scale.
The company expects PhotonLink revenue to begin ramping in the fourth quarter of calendar 2026 and is expanding six-inch indium phosphide and specialty fiber capacity. That gives investors a nearer-term milestone. Production shipments, capacity utilization, and margins will reveal whether the platform is becoming a profitable business as customer systems move into deployment.
The risk is that qualification and deployment proceed more slowly than investors expect. Manufacturing expansion commits capital before the full opportunity is realized, and customer interest does not guarantee immediate volume production. Coherent’s growth case becomes more persuasive when rising shipments are accompanied by attractive economics.
Rocket Lab: Repeat Orders Confirm Electron’s Value
Rocket Lab’s new Synspective agreement supplies a different type of commercial evidence. The Tokyo-based satellite operator contracted for 20 additional Electron launches, bringing its total contracted Electron missions to 47. The agreement is Rocket Lab’s largest commercial Electron launch contract, with the new missions scheduled annually from 2028 through 2031. Financial terms were not disclosed.
The most revealing feature is the repeat commitment from an existing customer. A satellite constellation operator needs reliable delivery into specific orbits, with scheduling that supports deployment of its network. Synspective’s additional order strengthens the argument that Electron provides a service worth purchasing repeatedly.
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Dedicated launch gives the customer greater control over mission timing and orbital placement than sharing a rocket with numerous other payloads. That control has economic value when coverage requirements depend on particular orbital positions or when deployment delays affect the customer’s business. Comparing launch providers solely by rocket size or cost per kilogram can overlook this advantage.
Synspective’s StriX satellites use synthetic aperture radar, allowing them to collect imagery at night and through cloud cover. Rocket Lab supplies the launches required to deploy that constellation. The satellite operator receives the revenue from selling imagery, while Rocket Lab’s opportunity depends on executing the missions economically.
A multi-year agreement can also improve planning for rocket production, staffing, and launch-site operations. It provides a stronger indication of demand than an expression of interest, but undisclosed pricing prevents a defensible calculation of contract revenue or profit.
The timing requires patience. Twenty missions over the four-year launch window average five annually, although the companies have not disclosed an equal allocation. This agreement should not be interpreted as 20 launches of near-term revenue. Satellite readiness, launch schedules, payment terms, and revenue recognition will determine when the benefits appear.
Rocket Lab’s development of Neutron, its larger reusable vehicle, adds another consideration. Electron’s commercial progress supports the existing business, but it does not resolve the spending requirements or eventual economics of the larger rocket. Investors should assess successful order conversion in Electron alongside disciplined execution of the company’s expansion plans.
Vertiv: More Infrastructure Revenue From Each Data Center
Vertiv adds an established earnings business to the comparison. In my July 9, 2026, 24/7 Wall St. article, “South Korea’s $576 Billion AI Bet Shows Why Vertiv Is More Than a Cooling Company,” I emphasized that Vertiv’s opportunity extends across power delivery, cooling, and related infrastructure. Wells Fargo’s new bullish coverage reinforces the relevance of that broader positioning.
For investors, the key relationship is between computing density and infrastructure spending. More demanding equipment can require greater power-delivery and heat-removal capabilities within the same building. Vertiv’s opportunity can therefore expand through additional data center construction and through the infrastructure required to support more intensive computing at existing or planned sites.
This creates a parallel with Coherent. Coherent seeks to supply more of an optical connection; Vertiv seeks to supply more of the infrastructure required to operate a data center. Both could benefit from increasing customer spending per deployment, although their products, margins, and competitive positions differ.
Vertiv’s second-quarter results provide evidence that demand is already producing earnings. Revenue reached $3.274 billion, up 24% from a year earlier. Adjusted operating margin increased to 22.6%, a gain of 4.1 percentage points, while adjusted diluted earnings per share rose 60% to $1.52. Reported GAAP diluted earnings per share increased 53% to $1.27.
The margin improvement matters because it shows that earnings grew faster than sales. For a company expanding manufacturing and serving larger projects, profitable growth provides stronger support for the investment case than order growth alone. Continued operational execution remains important as deployments become larger and more complicated.
Vertiv’s planned acquisition of UtilityInnovation Group extends that opportunity. Announced September 2, the transaction includes approximately $1.45 billion in cash at closing and up to $1.15 billion in additional payments tied to earnings targets. Completion is expected in the fourth quarter of 2026, subject to closing conditions.
The acquired capabilities include microgrid controls and coordination of onsite generation and energy storage. These could help Vertiv participate earlier in a customer’s power-planning decisions, extending its involvement beyond equipment installed inside the data center. The distinction matters when power availability determines whether a project can begin operating.
My interpretation is that this expansion could increase the portion of a customer’s infrastructure budget Vertiv can address. However, it does not mean Vertiv becomes an electricity producer, and the acquisition’s value will depend on integration, customer adoption, and financial returns. A strategically relevant acquisition still needs to earn an acceptable return on its purchase price.
Vertiv consequently offers the clearest current earnings evidence among the three opportunities examined. It also remains exposed to project delays, supply constraints, and the valuation investors assign to expected growth. Strong customer demand is most valuable when equipment is delivered, margins hold, and earnings expectations are met.
How the Three Companies Convert Demand Into Growth
According to Table 2, the most useful comparison is the mechanism through which each company could earn more from customer investment. Coherent’s opportunity involves supplying more technologies within an optical connection, Rocket Lab’s involves repeat dedicated missions, and Vertiv’s involves broader power and cooling content plus services. These differences identify the operating developments investors should monitor after the analyst announcements.
Table 2. Growth Mechanisms, Commercial Timing, and Investor Tests
Investor consideration
Coherent
Rocket Lab
Vertiv
Customer requirement
Efficient movement of information
Reliable delivery to required orbits
Reliable power and heat removal
Mechanism for additional revenue
More optical technologies and assemblies per deployment
Repeat dedicated launches
More infrastructure equipment and services per site
Current evidence examined
PhotonLink engagements and long-term agreements
20 additional contracted Synspective missions
Reported revenue, margin, and earnings growth
Timing of highlighted opportunity
PhotonLink ramp expected in calendar Q4 2026
New missions scheduled for 2028–2031
Existing infrastructure sales; planned acquisition closing in calendar Q4 2026
Evidence that strengthens the case
Volume shipments with attractive margins
Completed launches with improving economics
Profitable deliveries and successful expansion of power capabilities
Principal execution uncertainty
Qualification and adoption pace
Launch timing and development spending
Project timing, supply constraints, and acquisition integration
Source: The Information Network analysis.
These stocks also provide different forms of exposure rather than interchangeable participation in a single technology theme. Coherent and Vertiv depend partly on AI infrastructure investment, creating some shared demand risk. Rocket Lab’s constellation business adds a separate commercial market, although its development spending and execution requirements introduce their own uncertainties. Owning all three would diversify business activities without eliminating investment risk.
Investor Takeaway
The bullish calls on Coherent, Rocket Lab, and Vertiv deserve attention because identifiable commercial developments support each company’s opportunity. PhotonLink could increase Coherent’s contribution to optical connections, Synspective’s repeat order strengthens Electron’s commercial relevance, and Vertiv’s earnings demonstrate that infrastructure demand is already producing financial returns.
My assessment is that Vertiv offers the strongest current earnings evidence, Coherent offers the nearer-term new-platform catalyst, and Rocket Lab offers longer-duration visibility from its latest launch agreement. Those distinctions concern the opportunities examined here; the best investment still depends on the valuation paid and the growth expectations already incorporated into each stock.
Investors should connect each purchase decision to the evidence that would justify a higher valuation. For Coherent, that means profitable PhotonLink production. For Rocket Lab, it means successful missions and disciplined expansion spending. For Vertiv, it means continued margin performance and attractive returns from broader power capabilities. The analyst targets frame potential appreciation, while commercial execution determines whether shareholders receive it.
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