Corning Stock Takes a Pause Amid Record Surge
Corning’s stock had a bit of a breather on Thursday after an impressive run. Following a four-session streak that saw it climb over 23%, some investors understandably decided to take profits. Still, we remain optimistic about what’s in store for the stock. Industrial tech stocks generally saw a dip of around 6.5% during afternoon trading after a significant rally. Yet, Corning is up more than 70% this year, making it one of the standouts in the S&P 500 and the leading stock for 2026. Projections show increases of 84% in 2025 and 56% in 2024, leading to a total jump of 400% in under three years. It may seem overly ambitious, but for both the club and several Wall Street analysts, this could be just the beginning for the century-old glass manufacturer reshaping itself into an AI infrastructure titan.
Recently, Citi increased its price target for Corning, now setting it at $170, up from $120. On Tuesday, the club itself raised its target from $140 to $160. I made a modest adjustment to my Corning position last week to secure a 55% gain, but my overall investment view remains unchanged. The emphasis on building AI data centers and the critical role of Corning’s fiber optic cables continues to be our focus. These cables are increasingly replacing copper in data centers as they run cooler, using less energy for AI infrastructure. This is vital, particularly as Nvidia’s CEO, Jensen Huang, highlights energy savings as a foundational element of efficient operations. He categorizes energy at the very base, followed by chips, infrastructure, AI models, and applications.
In March 2025, Corning was named one of Nvidia’s partners in the silicon photonics ecosystem, intending to connect chip manufacturers’ GPUs in AI data centers. Last month, Corning also revealed a significant deal with Meta Platforms, which will pay up to $6 billion by 2030 for fiber optic cables. Wendell Weeks, Corning’s CEO, hinted at additional future deals with major tech companies, stating, “Hyperscalers are going to be our biggest customers next year,” during an interview with CNBC in January. The current surge in data center investment is spurred by the rising capital expenditures of giants like Meta, Amazon, Microsoft, and Alphabet.
This financial boom is translating into higher revenue for Corning, particularly in its optical communications division, which accounted for around 38% of its total revenue last quarter. Projections show a 35% increase in sales and a 71% rise in net income for 2025. Stephen Fox, founder of Fox Advisors, noted in a CNBC interview that this growth reflects the demands of cloud data centers for more efficient, lower-power solutions, as well as the increasing scale of operations among cloud service providers.
Additionally, Corning signed a $2.5 billion agreement with Apple, ensuring that all glass for iPhones and Apple Watches will be produced at their Harrodsburg, Kentucky facility. A month post-announcement, Jim Cramer visited the site, which should further benefit Corning’s specialty materials segment, contributing just over 12% of last quarter’s sales. Other notable device manufacturers, including Samsung and Alphabet’s Google, also utilize Corning’s glass.
With all these positive developments, one might wonder if there’s a looming downside. This concern is somewhat justified, especially considering Corning’s current price-to-earnings ratio is markedly higher than in previous years. That said, the elevated valuation seems warranted as Corning evolves from a traditionally value-focused stock to one that fits into the growth category amid the burgeoning AI infrastructure market. In the past three years, Corning’s forward P/E has climbed from 19.5 to 48. However, on a growth-adjusted basis, the stock appears relatively affordable. For 2023, Corning’s PEG ratio stands at 2.8, up from 1.8 last Thursday, indicating that investors may be getting good value, even with the higher earnings multiple, as these earnings are anticipated to grow much more rapidly than in prior years.
UBS analyst Josh Spector shares a similar viewpoint on Corning’s growth prospects, pointing out the shift from copper to fiber optic cables. Not only do fiber optics operate at cooler temperatures, but they also offer faster speeds, particularly over long distances. While Spector doesn’t expect a swift transition in data centers from copper to fiber, he believes that if it happens, it could significantly boost revenue for Corning’s optical division. “This is a sustained growth outlook over the next five years amid long-term trends,” he remarked, reinforcing his buy rating with a $160 price target.
