Light communication business surges by 36%! Corning Inc (GLW.US) receives billions in "lock production" from NVIDIA Corporation. Wall Street cheers: AI optical communication new king is born.

Corning Inc, the fiber optic cable manufacturer, saw a 10.84% increase in its stock price on Monday, closing at $207.21, approaching the 52-week high of $209. Prior to this, Bank of America analysts included this glass and fiber optics giant in their "US No. 1 List" (their preferred stock list), continuing the momentum from last week's deal with NVIDIA Corporation. Currently, it is not just chip manufacturers that are attracting investor attention. Companies like Corning Inc, providing fiber optics and optical connectors, are becoming the focus as the spending on AI infrastructure increases significantly. These products ensure fast and scalable data flow within large-scale AI data centers, where processors are handling massive information loads. Corning Inc's stock price has risen by over 130% in the past six months. The partnership between Corning Inc and NVIDIA Corporation, announced on May 6, is aimed at expanding the manufacturing of advanced optical connection products for AI infrastructure in the US. Corning Inc plans to increase its domestic optical connection capacity tenfold, while US fiber optic production is expected to grow by over 50%. Both companies announced plans to establish three advanced manufacturing facilities (two in Texas and one in North Carolina), creating over 3,000 jobs. NVIDIA Corporation CEO Jensen Huang described AI as "the greatest infrastructure build of our time." Wendell Weeks of Corning Inc stated that this partnership is not just a technological story but also a "manufacturing story." According to a securities filing, NVIDIA Corporation acquired warrants of Corning Inc, paying a total of $500 million. This deal gives NVIDIA Corporation the option to buy up to 15 million shares of Corning Inc stock at a price of $180 per share, in addition to an additional 3 million warrants settled at a nominal exercise price. Huang and Weeks told the media last week that the actual financial support could be even larger than initially disclosed. In addition to the equity-linked investment, NVIDIA Corporation has invested billions of dollars to support Corning Inc's factory construction. The news of NVIDIA Corporation's investment in Corning Inc has been met with positive outlook by Wall Street analysts, who see this as a turning point for the company and a significant signal of reshaping the AI infrastructure supply chain. Bank of America placed Corning Inc on its preferred list earlier on Monday. Prior to this, several Wall Street institutions had raised their price targets for the stock, with Oppenheimer raising to $210, UBS Group AG to $223, and Citigroup to $225. Currently, the average target price for Corning Inc on Wall Street is around $202, with a median of $210 and a high of $230. This collective bullish sentiment reflects institutional recognition of Corning Inc's transformation from a traditional glass manufacturer to a core supplier of AI optical communication infrastructure. Analyst Martin Yang of Oppenheimer reaffirmed his "outperform" rating, pointing out that Corning Inc's deep integration with ecosystem leaders like NVIDIA Corporation, Broadcom Inc., Meta, and Microsoft Corporation has positioned the company as a key provider of foundational infrastructure for generative AI data center construction. He believes that the transition to Co-Packaged Optics (CPO) and scalable data center solutions is a core valuation driver, with the potential to expand the current business scale by 2 to 3 times by 2030. Citigroup analyst Asiya Merchant maintains a "buy" rating, emphasizing the value of each AI accelerator in optical connections, estimating it to be between $500 to $1000, with further upside potential through CPO deployment. She specifically mentioned Corning Inc's collaboration with Microsoft Corporation in the field of hollow-core optical fibers and the commitment of customers to invest in its capacity expansion, confirming strong and sustained demand. Analysts generally believe that NVIDIA Corporation's multibillion-dollar financial support not only eliminates the financial risks of Corning Inc's expansion but also ensures its monopolistic position in the optical communication market through "directional lock production." Despite the sluggish performance of consumer electronics businesses such as smartphones, the 36% growth in the optical communication sector and the upward revision of the annual sales target to $20 billion have become core drivers of the stock price hitting record highs. As AI computing clusters evolve to the level of exaflops, the value of Corning Inc as the "gatekeeper" of the physical layer is being reassessed by Wall Street. Corning Inc has raised its "Springboard" growth plan, now expecting annual sales to reach $20 billion by the end of 2026. The company's targets will further increase after this: $30 billion by 2028 and $40 billion by 2030. The sales run rate refers to the level of annual sales that will be achieved if current or expected quarterly data continues. The performance in the first quarter has provided confidence to the Bulls. Corning Inc reported an 18% increase in core sales (its preferred non-GAAP metric), reaching $4.35 billion. Core earnings per share (EPS) increased by 30% to $0.70. The optical communication business took off, growing by 36%, while the CECEP Solar Energy business surged by 80%. This is not just about Corning Inc. As the market pursues the concept of AI data center bandwidth, optical networking stocks Lumentum and Coherent also jumped. Now, Corning Inc is classified as an AI infrastructure supplier, not just a traditional glass company. Optical communication moat Corning Inc is not a newcomer in the field of optical communication. This materials science giant with over a century-old history invented low-loss optical fiber in the 1970s, laying the technological foundation for modern optical communication. Within AI data centers, where thousands of GPUs are simultaneously processing massive parameters, the transmission distance and bandwidth of electrical signals are approaching physical limits, making optical interconnectivity the only feasible solution. Corning Inc's core strength lies in its vertical integration ability "from glass to system": it not only produces optical fiber preforms and fiber itself, but also manufactures critical components such as connectors and couplers, offering end-to-end optical connection solutions. This full industry chain layout translates into significant capacity and cost advantages in the AI era. According to the partnership plans disclosed by both parties, Corning Inc will increase its domestic optical connection capacity by tenfold, increase fiber production by over 50%, and build three advanced manufacturing facilities in Texas and North Carolina. Such aggressive capacity expansion is built on Corning Inc's deep manufacturing process expertise - the precision requirements for optical communication products are extremely high, something that new entrants cannot replicate in the short term. More importantly, Corning Inc's performance inflection point is worth noting. In the first quarter of 2026, its optical communication business revenue surged by 36% year-on-year, indicating that the AI infrastructure demand is beginning to materialize. This means that Corning Inc is transitioning from a traditional glass manufacturer to a core supplier of AI infrastructure. Traditional businesses holding back However, there are still some obstacles. Corning Inc's non-optical divisions continue to show imbalanced performance. Market reports last month indicated that slow electronic product upgrades and weak smartphone demand continued to drag down some business segments. For the second quarter, Corning Inc expects core sales of around $4.6 billion, slightly lower than analyst expectations. In addition, Corning Inc faces more risks, including AI-driven orders potentially lagging behind investor expectations, longer-than-planned factory construction cycles, or major cloud buyers potentially readjusting their budgets. Factors such as demand, competition, supply chain fluctuations, government support, and shifts in capital expenditures - all of these could potentially derail its performance.