Fidelity Investments, an investment management company, recently released its first quarter 2026 investor letter for the “Fidelity Growth Strategies Fund.” A copy of the letter is available download here. Fidelity Growth Strategy is a diversified equity strategy aimed at domestic midcap growth stocks. This approach focuses on identifying quality companies that deliver stable growth above average and can outperform over time. The fund (Retail Class Shares) returned -3.21% in the quarter, outperforming the -6.35% return of the benchmark Russell MidCap® Growth Index. The outperformance was mainly due to industry and stock selection, especially in the industrial sector. The US stock market started 2026 on a positive note, but declined in late February amid concerns over the feasibility of artificial intelligence investments and Middle Eastern conflicts. Investors turned to defensive strategies favoring stable, large-cap firms, leading to value equities outperforming growth. The fund continues to favor companies with strong competitive moat and growth potential. Additionally, please check out the fund’s top five holdings to know its best picks in 2026.
In its first quarter 2026 investor letter, Fidelity Growth Strategies Fund highlighted Coherent Corp (NYSE:).COHR) as a leading performance contributor. Coherent Corp. (NYSE:COHR) manufactures and markets engineered materials, optoelectronic components and devices, as well as laser systems used in data center, industrial and communications applications. On May 18, 2026, Coherent Corp. (NYSE:COHR) closed at $362.83 per share. Coherent Corp (NYSE:COHR)’s one-month return was 2.85%, and its shares were up 345.05% over the past 52 weeks. Coherent Corporation (NYSE:COHR) has a market capitalization of $69.09 billion.
Fidelity Growth Strategies Fund said the following regarding Coherent Corp (NYSE:COHR) in its Q1 2026 investor letter:
“An out-of-benchmark holding in Coherent (+29%), a technology company that manufactures precision optical components and coatings, was another top contributor. Shares were driven by increased AI infrastructure investments and growing demand for the firm’s products in advanced semiconductor manufacturing. On February 4, Coherent announced solid quarterly financial results, which included a 33% increase in revenue from its data center and communications segment. On March 23, the company was added to the S&P 500® Index, which gave the stock a further boost.”
Coherent Corporation (NYSE:COHR) is not on our list The 40 Most Popular Stocks Among Hedge Funds Arriving in 2026. According to our database, 109 hedge fund portfolios held Coherent Corp (NYSE:COHR) at the end of the fourth quarter, up from 78 in the previous quarter. In the third quarter of fiscal 2026, Coherent Corp. (NYSE:COHR) reported Income Of $1.8 billion, an increase of 7% sequentially, and 21% year-on-year, driven by growth in AI data center and communications demand. While we acknowledge the potential of Coherent Corp. (NYSE:COHR) as an investment, we believe some AI stocks offer more upside potential and have less downside risk. If you’re looking for an extremely undervalued AI stock that could also significantly benefit from Trump-era tariffs and the onshoring trend, check out our free report. best short term ai stocks.