Corning’s Stock Rally Risks Outpacing Reality

Shares of iconic glassmaker Corning Inc. have doubled so far this year to their highest price ever, thanks to surging demand for Corning’s fiber optic cables that connect servers and AI data centers to one another.

A https://www.theinformation.com/briefings/nvidia-inks-deal-invest-3-2-billion-corning">partnership Corning announced with Nvidia this week gave the stock another lift.

But Corning’s current deluxe valuation, which is now based almost entirely on sky-high expectations for its optics business, might be more fragile than it appears.

Corning is currently trading at a significantly higher multiple of either revenue or profits than rival fiber optic cable makers Prysmian or Furukawa Electric (see chart below).

Both are also benefiting from the AI data center boom, although Corning’s expected growth rate is higher.