Corning ( GLW ) stock is up 200% in the past year. Meta has committed up to $6B by 2030 for fiber optic cable.
Corning’s optical communications segment grew 24% year-over-year in Q4, driven by AI data center connectivity demand.
Corning raised its Springboard target to $11B in annual sales by 2028 from a previous target of $8B.
An analyst named NVIDIA just named his top 10 AI stocks in 2010. Get it for free here.
Chip stocks get all the praise in the AI rally, but quiet money often lurks in the pipeline. Corning (NYSE:GLW) A clean example of this, with a stock of almost 200 percent compared to last year, a run that will surprise people who still think of it as “just glass”.
The company makes a lot of glass, ceramics, and the like, but you know what else needs glass? Fiber AI. Data centers now require massive amounts of switches, racks, and clusters, and no matter how fancy all that silicon is, you need something to connect them. META (NASDAQ: META ) It even promised to pay Corning up to $6 billion by 2030 for fiber-optic cable for its AI data centers, which tells you it’s no longer a significant development.
Read: The analyst who called NVIDIA in 2010 Just naming his top 10 AI stocks
Corning’s reputation as just a glass company has kept it under wraps. That’s why, I like to call it the “utility AI company”, because most investors just pass by and don’t realize how good this pick and choose game is.
Data centers running AI models will require up to five times more optical connectivity than today. The demand is huge, and companies are ready to supply several years. AI companies are not investing heavily in optical fiber, but without it, data center construction will be paralyzed.
Corning also sees demand from data centers that need to replace copper wiring with optical fiber. Bloomberg North American data centers alone see up to 2.4 million tons of copper usage by 2030. Copper is fine for small-scale nodes, but when you start working with hundreds of GPUs per node, it becomes more cost-effective than optical fiber.
In terms of cost effectiveness, copper prices have increased.
Corning is set among the biggest beneficiaries because of this.
Recent reports have indicated that copper shortages may put data center construction at risk. If that happens, fiber optics will start to become necessary.
Corning is trading at a premium right now, and it’s worth looking at how much you’re paying for the stock before you put money here. Earnings ratios are really rich, at 51 times the previous P/E ratio. For a small AI startup that just became profitable, it’s not that expensive.
Equity is different for GLW stock because Corning is a mature business that is already generating cash.
The historical forward PE ratio has been around 20-25x during rallies and around 12x during downswings. What we see now is worth being a little cautious. The market has been hitting higher and higher premiums for the past few months.
I believe the market is set to overpay for GLW stock because the momentum is there, and it’s still going strong. There’s never been such an aggressive restructuring of the data center, and by the time it’s done, the company’s $135.4 billion market cap today looks like a steal.
The meta deal is the biggest factor here. Wall Street expects other hyperscalers to participate to protect their optical cable supply. Moreover, even before the Meta deal, Corning had built a satisfactory track record. The company posted four consecutive gains through 2025, with full-year core EPS rising 26% and operating margins expanding 20.2%, which beat them a full year ahead of their internal schedule. Specifically in Q4, net sales grew 20% to $4.22 billion. The optical communications segment grew 24% year-over-year in Q4 alone, with enterprise sales growing at 58% from Gen-AI product adoption in Q3.
The future also looks bright. Note that the growth rate below reflects the average annual growth rate.
Corning’s internal growth roadmap, which they call the “Spring Board” plan, has been reviewed several times above. It originally targeted $3 billion in additional annual sales. Management has boosted its target of $11 billion in annual sales by 2028. They see $20.7 billion in sales and $2.6 billion in revenue by 2028. That’s about 13.4% annual revenue growth from here. Wall Street buys what they sell, analysts now expect EPS to nearly triple to $7.01 by 2030.
You’d be right to point out that even if it fetches a 50x premium to its $2.6 billion in earnings, GLW stock will be undervalued and trade at a market cap of $130 billion. However, I believe that speculation is set to continue. Rising copper prices will make fiber more affordable, and data center construction remains stagnant. I wouldn’t touch GLW stock if you’re concerned about valuations. This is not value trading and is purely for growing your portfolio. I would argue that this mature copper business has more staying power than chip stocks that are always fighting for market leadership.
Wall Street is pouring billions into AI, but many investors are buying the wrong stocks. The analyst who first identified NVIDIA as a buyback in 2010 — before its 28,000% run — has identified just 10 new AI companies that he believes can deliver returns beyond that point. One dominates the $100 billion equipment market. Bill addresses the single biggest obstacle to maintaining AI data centers. The third segment is a net play in the optical network market that is quadrupling. Most investors haven’t heard of half of these names. Get a free list of all 10 stocks here.
