Coherent and GE Vernova, two artificial intellience plays, received positive analyst initiations on Wednesday. Coherent stock leaped to a new high. GE Vernova stock popped in buy range.
The analysts rated the AI-related stocks, whose shares have already made huge moves in 2024, as buys. Their price targets suggest more room for Coherent and Vernova shares to run after triple-digit rallies.
Coherent Stock, AI Winner, Initiated At Buy
Equity research firm Jefferies initiated coverage of Coherent stock with a buy rating and $135 price target. Wall Street still underestimates the company's earnings power as new CEO Jim Anderson streamlines operations and implements a restructuring plan, Jefferies analyst George Notter told investors, according to a research note seen by TheFly.com.
IBD profiled Coherent stock in a recent New America column. The company specializes in materials, optoelectronic components and laser systems. That includes optical circuit switches and transceivers for AI data centers, as the growth of artificial intelligence creates intense demand for data processing.
On the stock market today, shares of Coherent jumped 5.1% to 112.02. The AI stock hit a record high intraday, taking year-to-date gains to 157%.
Coherent stock is extended from a recent bounce off support at the 50-day/10-week moving average, which provided a 97.35 buy point.
Investors could use 111.66 as a buy point from a short consolidation, but the risks are higher from a short consolidation and more than 10% above the 50-day line.
GE Vernova Stock Initiation
Meanwhile, Wolfe Research started coverage of GE Vernova stock with an outperform rating and $403 price target.
The firm told investors it sees potential for growth and margin expansion well ahead of the Street view. GE Vernova is hosting its second investor day of the year on Dec. 10. Wolfe analysts said management could use the event to raise its forecast for 2028 sales growth. "There is no better proxy for accelerating demand for electricity," they said.
In the latest quarter, the General Electric energy spinoff saw strong power and electrification markets offset losses in wind energy. Analysts predict big GE Vernova earnings growth next year.
The company is benefiting, in part, from massive energy demand as big technology companies build out AI infrastructure.
Among other AI opportunities, GE Vernova offers AI and machine learning (ML) software to automate the inspection and monitoring of industrial assets. It also taps an opportunity in small nuclear reactors. Bank of America analysts wrote in October that GE Vernova, with over 60 years of experience in nuclear power, has developed the BWRX-300 small modular reactor. The SMR has won its first contract and has a pipeline of 28 units in various stages of regulatory approval, the analysts said.
Operators of AI data centers have turned to nuclear power plants as a potentially lower-cost and lower-emission source of electricity.
In Wednesday's stock market, GE Vernova stock popped 3.6% to 343.91. Shares are in buy range from a recent rebound off the 21-day exponential moving average. Investors could use 346.67, marking the Dec. 2 high, as an alternative entry.
The AI-related stock has nearly tripled since its March debut, surging 199%. That includes a 33.7% rally in the current quarter to date.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
