Upward trend in AI demand boosts Corning stocks; is investment worthwhile?
In a significant move, Corning (NYSE: GLW), a leading US speciality glass and ceramics company with a current expected annual sales of $12.6 billion, has announced a three-year program aimed at adding an additional $3 billion in annual sales.
This ambitious plan comes as Corning positions itself as a key player in the data center market, a foundation of the artificial intelligence (AI) market. The company's CEO, Wendell Weeks, attributes Corning's outperformance to AI.
One of the key areas Corning is focusing on is the development of new fibres, cables, connectors, and solutions to help customers fit all those extra connections into the same spaces. This is particularly relevant in the context of AI, as neural networks for generative AI require about 10 times more fibre connections than a traditional data center.
Corning's role in the data center market is not new. In the 1970s, Corning's team was responsible for workable fibre-optic cable, providing a significant advance in data-carrying capacity compared to copper wire. Today, Corning remains a key manufacturer of the physical fibre cable used in data centers in the US.
In addition to its data center offerings, Corning also manufactures glass for various electronic devices, including iPhones and other mobile phone brands, as well as car dashboards. The company's new products are designed to help customers cut installation costs, reduce project time frames, and lower their carbon footprints.
The increasing appreciation of Corning as a company tied to the growth of AI could lead to gains in its shares. In the second quarter, Corning's turnover is expected to reach $3.6 billion, up from previous expectations of $3.4 billion. The company's core earnings per share in the quarter are also expected to show a return to year-on-year growth.
Nvidia, currently the top company in its market due to its fast microchips, is a testament to the potential of the AI market. Corning's strategic positioning in this market could position it for similar success.
In conclusion, Corning's ambitious expansion plan, coupled with its strategic positioning in the AI market, makes it an exciting technology stock to watch in the coming years.
