GLW, AVGO Partner to Boost Processing Capabilities of AI Data Centers

Corning Incorporated GLW recently announced that it has entered into a multi-year collaboration with Broadcom Incorporated (AVGO), a premier designer, developer, and global supplier of a broad range of semiconductor devices. Through this partnership with Corning, Broadcom is aiming to deliver a next-generation co-packaged optics (CPO) infrastructure designed to enhance the processing capabilities of data centers, marking a significant step toward addressing the growing demands of artificial intelligence (AI) workloads.

In today’s hyper-connected digital world, as AI technologies evolve and scale, data centers are increasingly focusing on delivering faster performance, higher bandwidth, and improved energy efficiency. Broadcom’s Bailly CPO system features eight optical engines, each offering 6.4 terabit per second (Tbps) of bandwidth through silicon photonics. These engines are co-packaged with the Tomahawk5 Ethernet switch chip, enabling seamless high-speed data transmission. Corning will serve a critical role as a qualified supplier of the optical infrastructure supporting these engines. 

The company will provide a suite of high-performance optical components, including fiber harnesses equipped with front-plate and external laser module connectors, single-mode and polarization-maintaining fibers, and precision fiber array units. The integration of such cutting-edge technologies is expected to deliver significant improvements in optical interconnection density and power savings, making it the industry’s first CPO-based 51.2 TBps ethernet switch. 

Does GLW Stock Stand to Gain From the Partnership?

Corning’s competitive strength lies in its focus on innovation. The company offers a range of products focused on the data center, with a portfolio that includes optical fiber, hardware, cables, and connectors, enabling it to create customized optical solutions that meet evolving customer needs. The growing adoption of innovative optical connectivity products for generative AI applications is expected to be a key growth driver in the Optical Communication segment.

Corning continues to expand its portfolio of data center solutions with innovations like the CPO FlexConnect Fiber. This single-mode fiber is engineered for enhanced bend performance and reduced multi-path interference, optimizing overall system performance within CPO architectures. 

In addition to this effort, both companies are now expanding their efforts to develop next-generation CPO solutions based on 200G per lane technology, aiming to unlock even greater efficiency and data throughput. These advancements are expected to generate incremental demand for Corning’s solutions, leading to higher revenues. An improved financial performance is likely to propel the stock upward. 

GLW’s Stock Price Performance

Shares of Corning have soared 35.6% over the past year compared with the industry’s growth of 33.2%.

GLW Zacks Rank and Stocks to Consider

Corning currently carries a Zacks Rank #3 (Hold). 

A couple of better-ranked stocks in the broader industry have been discussed below:

InterDigital IDCC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the trailing four quarters, InterDigital delivered an earnings surprise of 160.15%. The company is a pioneer in advanced mobile technologies that enable wireless communications and capabilities.

InterDigital designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G, and IEEE 802-related products and networks.

Arista Networks, Inc. ANET, carrying a Zacks Rank of 2 at present, supplies products to a prestigious set of customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers.

Arista delivered a trailing four-quarter average earnings surprise of 11.82% and has a long-term growth expectation of 14.81%. Arista currently serves five verticals, namely – cloud titans (customers that deploy more than one million servers), cloud specialty providers, service providers, financial services and the rest of the enterprise.

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

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