** Shares of Coherent COHR.N and Lumentum LITE.O rise on Mon after Raymond James upgrades both firms to 'strong buy' from 'outperform', citing increased demand amid artificial-intelligence expansion

** COHR's shares up 12.6% at $76.84, and LITE's stock up 8.9% to $72.57 in afternoon trading

** Concerns over co-packaged optics $(CPO.AU)$ -- which look to integrate optical components directly on a single semiconductor chip to address bandwidth and power challenges -- are overblown and have pressured the stocks recently, Raymond James said in note to clients

** Raymond James said total AI and non-AI datacom market is growing, adding that given Nvidia's NVDA.O Blackwell order disclosure, it sees upside to near-term estimates for 800G (gigabits per second) telecom demand

** In addition, the analysts said the optical telecom market, which includes wide area networking applications such as data center interconnects, has begun to recover

** However, Raymond James cut its PT on COHR to $91 from $110, and lowered PT on LITE to $82 from $96

** Last week, COHR announced its CPO collaboration with Nvidia, and LITE said it was selected as the AI poster child's silicon photonics partner

** With moves on Mon, COHR's shares still down ~19% YTD, while LITE's shares off ~21% in 2025

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))