Corning Stock Rises 76.7% in a Year: Should You Invest Now?

Corning Incorporated GLW has gained 76.7% compared to the communications components industry’s growth of 126.2%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.

It has underperformed compared to its competitors, such as CommScope Holding Company, Inc. COMM and Amphenol Corporation APH. CommScope has surged 307.3%, while Amphenol has gained 91.4% in the past year.

Corning Rides on Strength in Data Center Market, AI Focus

Corning is benefiting from solid demand across multiple segments. Strong adoption of generative AI products in the Enterprise Network business is primarily driving growth in the Optical Communications segment. Growing AI proliferation and high-performance computing requirements are pushing hyperscalers to expand their data center infrastructure. This trend is driving demand for data center interconnects which drives demand for datacenter interconnects which ensures seamless connection between data centers, facilitating smooth transfer of data and resources. 

Per a report of Mordor Intelligence, the data center interconnect market is projected to grow at a 14.98% compound annual growth rate between 2025 and 2031. Corning is set to benefit from this market trend. The company’s data center interconnect sales increased sequentially in Q3. Management expects the data center interconnect opportunity to be a $1 billion business by 2030. Moreover, Corning offers several other products focused on the data center, with a portfolio consisting of optical fiber, hardware and cables, enabling it to create optical solutions to meet evolving customer needs. This augurs well for its long-term growth. This robust portfolio of offerings, combined with a strong emphasis on innovation, allows it to gain a competitive edge against other major players such as Amphenol, CommScope and Prysmian Group.

Strength in Specialty Materials and Automotive Driving Growth

Healthy traction in the premium smartphone and broader consumer electronics market is driving growth in the Specialty Materials segment. Major smartphone manufacturers such as Samsung, Apple, Xiaomi and OnePlus have opted to deploy Corning’s advanced Gorilla Glass in their premium smartphones. Moreover, Apple has expanded its collaboration with Corning. The tech giant is set to use cover glasses made in Corning’s Kentucky manufacturing facilities for iPhones and Apple watches. 

Recently, Alpen High Performance Products, a prominent provider of next-generation glass and window systems, has selected Corning’s Enlighten Glass as the ultra-thin center pane. Utilizing Corning’s expertise in glass and material science, Alpen will develop advanced insulated glass units that will transform building designs in the U.S. market.

Ensurge, an industry leader in solid-state microbattery technology, is collaborating with Corning. The company aims to utilize Corning's Ribbon Ceramic materials and process technology to drive advancement in microbattery tech for consumer, defense, industrial and medical applications.

The company is also benefiting from healthy traction in the Automotive segment. In the third quarter, net sales grew 6% year over year, while net income grew 33% year over year. Strength in the light-duty vehicle market in China is driving growth. Corning is also aiming to capitalize on the evolving needs of global automakers. It has collaborated with AUO Corporation to facilitate the development of large-format curved automotive display modules. These factors are set to propel growth in the upcoming quarters.

Estimate Revision Trend

Earnings estimates for Corning for 2025 and 2026 have increased over the past 60 days.

Key Valuation Metric of GLW

From a valuation standpoint, GLW is currently trading at a discount compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 27.99 forward 12-month earnings, lower than 30.99 for the industry.

End Note

Corning is witnessing healthy traction across multiple end markets such as consumer electronics, AI data centers and more. Expanding client base in verticals such as battery tech is a positive. The company’s comprehensive portfolio offerings reduce its vulnerability to a downturn in one particular sector. Upward estimate revision highlights growing investors’ confidence in the stock’s growth potential. Hence, with an attractive valuation and a Zacks Rank #1 (Strong Buy), Corning appears to be a good investment option right now. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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