Why Corning's near record stock price and historically expensive valuation are worth it
HS 26/02/2026
Corning shares took a breather Thursday from this year’s record-breaking run. While we can’t fault profit-takers after a four-session winning streak of more than 23%, we still see big things for the stock. The industrial-focused tech name dropped roughly 6.5% in afternoon trading after its recent parabolic move higher. However, the stock was still up more than 70% year to date — making it one of the best performers in the S & P 500 and, by far, our top 2026 Club stock. That follows an 84% gain in 2025 and a 56% advance in 2024. That’s a combined gain of 400% in less than three years. It may sound improbable, but to the Club and many Wall Street analysts, this run is just the beginning for the 175-year-old glassmaker turned AI infrastructure powerhouse. This week, Citi added an upside 30-day catalyst on Corning and raised its price target to a Street-high $170 per share from $120. On Tuesday, the Club hiked our Corning price target to $160 from $140. Last week, we made a small Corning trim out of discipline in the face of this year’s big rally and locked in a 55% gain in the process. Our investment thesis, however, remains intact, hinging on the buildout of AI data centers and the role of Corning’s fiber optic cabling — not to mention its dominance in durable glass for mobile devices. Corning’s fiber optic cables are increasingly replacing copper in data centers because they run cooler, which means less energy is needed to support AI infrastructure. Finding ways to save and generate power for these facilities is foundational, as Nvidia CEO Jensen Huang’s five-layer cake of the AI stack points out. Jensen puts energy at the base level , followed by chips, infrastructure, AI models, and applications. Back in March 2025, Corning was announced as one of Nvidia’s partners for its silicon photonics ecosystem, which enables AI data centers to link the chipmaker’s graphics processing units (GPUs). More recently , Corning said last month that Meta Platforms will pay up to $6 billion through 2030 for fiber-optic cable in its data centers. Corning CEO Wendell Weeks hinted at more agreements with Big Tech names to come. “Next year, the hyperscalers will be our biggest customers,” Weeks told CNBC in an interview in January. The unprecedented level of investment into data centers is being driven by the ever-increasing capital expenditure plans of the biggest tech companies in the world, like Meta and the hyperscaler cloud leaders Amazon , Microsoft , and Alphabet . All this spending has meant higher revenue for Corning’s division that houses fiber optics. The company’s optical communications segment, which accounted for roughly 38% of overall sales last quarter , delivered 2025 revenue growth of 35% and saw a 71% net income increase. “That business has been obviously driven by what you’re seeing in cloud data centers because of the need for more bandwidth density and lower power solutions, as well as just the sheer magnitude of the buildouts that are going on at the cloud players,” Steven Fox, the founder of equity research firm Fox Advisors, told CNBC in an interview. Corning also entered into a $2.5 billion deal with Apple , which means that all glass for iPhones and Apple Watches will be manufactured at a Corning plant in Harrodsburg, Kentucky. Roughly a month after that August 2025 announcement, Jim Cramer toured the facility . This arrangement benefits Corning’s smaller specialty materials segment, which accounted for just over 12% of overall sales last quarter. Other device makers also use Corning glass, including Samsung and Alphabet’s Google. GLW 5Y mountain Corning 5 years With all that is going right for Corning, investors might wonder when the other shoe might drop. That’s understandable, given the stock’s price-to-earnings valuation is much higher than in past years. But, we think the higher multiple is justified because Corning has gone from being a value stock to a growth stock tied to the AI infrastructure boom. Over the past three years, Corning’s P/E on next 12 months earnings estimates has gone up from 19.5 times to 48 times. On a growth-adjusted basis, however, the stock has gotten cheaper. Corning’s PEG ratio (P/E to growth), which factors in how fast profits are expected to grow over time, was 2.8 in 2023 compared to 1.8 on Thursday. Lower is better here. Investors are essentially getting more bang for their buck. They’re paying a higher multiple for current earnings, but those earnings are expected to grow much faster going forward than they did in the past. UBS analyst Josh Spector feels similarly about Corning’s growth prospects, citing the move to replace copper lines in data centers with fiber optic cables made by Corning and others. In addition to running cooler, fiber optic cables are much faster than copper, especially over longer distances. While forecasting that copper replacement in data centers won’t happen for several years, Spector told CNBC in an interview that once it does happen it will be the “tipping point” for revenue growth in Corning’s crucial optical segment. “This is more of a durable growth outlook over the next five years tied to much more of a secular trend, which in our view has justified a lot of the rerating that you’ve seen in the stock,” said Spector, who has a buy rating on shares and a $160 price target. 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