Corning (NASDAQ: GLW) is the latest company to be sprinkled with AI pixie dust. The material science company’s Q2 projections, powered by its AI connection, sent shares skyward by 12% earlier this week. Corning anticipates exceeding its Q2 projections, with core sales expected to reach $3.6 billion, surpassing the initial $3.4 billion forecast. Earnings are projected in the $0.42 to $0.46 per share range.
The company foresees a resurgence in year-over-year growth for both core sales and earnings per share. The primary catalyst for this improved performance is the robust uptake of Corning's novel optical connectivity products designed for Generative AI applications. Corning's "Springboard" strategy aims to boost annualized sales by over $3 billion within the next three years, leveraging both cyclical factors and long-term industry trends. The company is so optimistic that it has started buying back shares in Q2.
Who Is Corning?
Corning, a $38 billion business, is a global leader in materials science. With a 170-year history of transformative innovations, its expertise is in glass science, optical physics, and ceramic science through its engineering and manufacturing capabilities. Corning’s heavy investment in RD&E, innovations in materials and processes, and long-term relationships with industry leaders are vital to its success. Its markets include optical communications, semiconductors, solar, mobile consumer electronics, display, automotive, and life sciences.
Corning’s glass optical fiber technology is essential for data centers processing AI’s large language models (LLMs). Experts predict that LLMs will need five times the current optical connectivity. The company is stepping up to this demand with new fibers, cables, connectors, and custom-integrated optical systems to reduce costs, time, space, and carbon footprint.
Looking Forward
As inflation and interest rates started to cool at the end of 2023, the prospect of easier funding for expansion has helped to turn Corning’s stock price upwards. GLW shares have gained about 75% and are approaching a level that could beat the company’s 2021 high. Although a few analysts (Deutsche Bank, Argus, Morgan Stanley) boosted their price targets last month, the company’s own guidance is what sent shares higher. The consensus rating on GLW is a Moderate Buy, with an average 12-month price target of $43.73 and a high estimate of $50. Investors are awaiting Corning’s Q2 2024 results on July 30.
Neither Julie Stoller nor Stocks.News have positions in this company.
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Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...