Corning shares got crushed on Tuesday after the specialty glassmaker delivered strong quarterly results. We attribute the weakness to the broader market rotation out of AI stocks, not any change in the company’s fundamentals. Core revenue in the three months ended June 30 rose 17% year over year to $4.74 billion, topping the consensus estimate of $4.61 billion, according to LSEG. Adjusted earnings per share (EPS) rose 30% to 78 cents, ahead of the 76-cent estimate, LSEG data showed. Corning fell more than 18% on Tuesday to roughly $115 at its lowest. The stock ultimately closed down 12% at $126.01. GLW 1Y mountain Corning 1-year stock performance Bottom line Corning fell victim to a market suffering a hangover from the first-half rager in stocks tied to artificial intelligence buildout. Many of those names, including Corning, surged to all-time highs, often parabolically. The problem with parabolic moves is that they draw in loads of hot money and investors betting with borrowed money, Jim Cramer said during Tuesday’s meeting . As a result, the unwind rarely stops where the rally began. Instead, it often extends well below that level as margin calls force more selling and downward momentum emboldens short sellers to press the bet. Corning’s spike came in the final two weeks of June, when shares rocketed from just under $170 to over $255 apiece. We pared back our position into that strength on June 25 and June 30 . We also have to consider the herd nature of the AI trade and understand that investors are bucketing these AI stocks together. That means when investors turn bearish, we see indiscriminate selling — even when the fundamentals remain intact, as is the case with Corning. It may not be the sole reason the stock is down — forward sales guidance was a tad short at the midpoint — but it was a driving factor. The longer-term outlook remains strong. Demand for faster compute continues to drive innovation in fiber optics (Corning’s expertise), which will slowly start to replace copper as the connective tissue of AI infrastructure. Corning’s solar business, while small, is also seeing robust growth, and management said this segment will soon provide a major tailwind to earnings. Why we own it Corning makes different types of specialty glass, including fiber optic cables. Corning’s fiber optics solutions provide a more efficient alternative to the copper wiring found in data centers. The company is also a huge supplier to Apple and makes the glass used in iPhones, Watches, and other Apple devices. Competitors : Ciena , Amphenol , Lumentum , Thermo Fisher Scientific (in copper and life sciences) Most recent buy: June 30, 2026 Initiated : Oct, 21, 2025 Corning also reaffirmed its multi-year growth targets, which call for a $20 billion annualized sales run rate by the end of 2026, a $30 billion run rate by the end of 2028, and $40 billion by the end of 2030. That amounts to a compound annual sales growth rate of 19% between the fourth quarter of 2026 and the fourth quarter of 2030, with earnings expected to grow even faster. Corning is a broken and hated stock, despite its solid performance and growth prospects. As long-term investors, these dynamics can often be the most frustrating. The fundamentals make you want to buy more shares, but the stock’s chart shows any addition over the last month has lost value. The market can stay irrational longer than you can stay solvent, as the old saying goes – another reason we’re opposed to trading or investing with borrowed funds. So, what can we do? For now, we need to remain patient. We like the results, we like what we heard on the post-earnings call with investors, and we still like the longer-term opportunity. But the stock is too volatile and hasn’t found its bottom, so we’re not stepping in. As a result, we reiterate our 2 rating and are cutting our price target to $180 from $245. (Notably, $180 is the exercise price given to Nvidia for its Corning warrants in May.) We will monitor the price action and volume for signs that the sellers are done, along with updates from the hyperscalers that are driving much of the AI infrastructure spending. Commentary Corning’s top-line beat was driven by outsized growth in its optical communications and solar segments, up 32% and 90% year-over-year, respectively. Optical Communications is the most consequential given it’s the largest segment and also where the data center exposure lies. The unit hit a record for profitability, with enterprise sales growing 65% year-over-year and AI data center-related sales nearly doubling versus the year-ago period. Perhaps more important than the reported results, the team said sustained strong demand is resulting in an accelerating pace of orders. On the call, management said the reported results reflect only scale-out fiber demand; the company is not yet seeing the benefits from demand for scale-up or photonics. As noted in our coverage of the Corning-Nvidia deal, “scale-out” refers to the connections between server racks across the data center, whereas “scale-up” refers to the connections between components inside the server racks themselves. The company also said its data center business will be able to expand faster than the rate of GPU growth, driven by 1) denser chip clusters requiring another layer of networking cables; 2) the need for networks with higher bandwidth; and 3) more optical technology being used inside individual server racks (the scale-up opportunity). Photonics refers to the opportunity Corning has to bring optics “inside the box” — co-packaged optics (CPO) and near-packaged optics (NPO). The move to CPO/NPO is about getting the fiber closer to the chip. Rather than using a plug-in style interface, CPO/NPO optics are fused onto the circuit board. In the case of NPO, the optical engine and main chip are packaged in separate substrates, whereas with CPO, the two are packaged into the same substrate. In June, Corning announced a deal , worth billions of dollars, with Amazon to provide optical fiber to power and connect its rapidly expanding U.S. data centers. In January, Meta said it would pay $6 billion to Corning for its fiber-optic cables. The company has hinted that another big deal is in the works. The glass innovations segment was the main blemish on the report, missing sales expectations. Fortunately, the team was able to offset that with strong profit margin performance. The marginal growth that was delivered came on the back of higher display glass sales. In the presentation, management noted that while elevated memory prices should negatively impact the mobile device market, Corning expects to outperform. The company provides glass for Apple’s iPhones, which are in the midst of an upgrade cycle that should accelerate on the back of more Apple Intelligence updates — good news for Corning. Automotive sales benefited from increased Corning products in vehicles. More components at higher prices per vehicle means that the company can outgrow the market. Diesel sales were up 3% year-over-year, and a notable readthrough for logistics companies, up 13% sequentially, driven by Class 8 orders, Class 8 trucks being those that exceed 33,000 pounds. In Solar , while top-line growth was strong, income results missed the mark. The company expects both sales and profits to improve starting in the third (current) quarter. Management continues to see this business growing into a $3 billion revenue business over time, with profitability better than the companywide average. Guidance For the current quarter, management forecasts core sales growth of about 16%, resulting in revenue guidance of about $4.9 billion to $5 billion. That compares to the LSEG consensus of $4.97 billion, a tad short at the midpoint. Core earnings are expected to be between 85 cents and 89 cents per share, better than the 85-cent estimate at the midpoint. (Jim Cramer’s Charitable Trust is long GLW. See here for a full list of the stocks.) 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Corning plunges despite strong results — here’s our plan for the stock
