Corning Rises 62.8% in Three Months: Is the Stock Worth Buying?

Corning Incorporated GLW has gained 62.8% compared to the communications components industry’s growth of 64.2%. The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.Image Source: Zacks Investment ResearchIt has underperformed compared to its competitor, such as CommScope Holding Company, Inc. COMM, but outperformed Danaher Corporation DHR. CommScope has surged 108.5%, while Danaher has gained 6.4% in the past year.Key Growth Drivers for GLWCorning’s broad portfolio offerings cater to multiple industries, which is a major advantage. Hyperscalers like Microsoft, Google and Amazon are developing larger GPU clusters by adding more AI nodes. These AI nodes are connected to others with fiber. This trend has created a significant growth opportunity for Corning. Moreover, hyperscalers are also actively scaling up the network in data centers. Companies are focusing on creating more powerful nodes that will eventually support hundreds of GPUs per node, significantly higher than the less than 100 GPUs per node we see today. This trend makes fiber more affordable, faster and power efficient than copper. With its comprehensive portfolio of fiber optic connectivity products, Corning is well-equipped to capitalize on this market trend and gain a competitive edge against its competitors, such as CommScope and Amphenol. The company is already witnessing healthy traction in the data center market, evident by its 41% sales surge in the Optical Communications business in the second quarter. Corning continues to focus on developing leading-edge cover materials, which have been deployed on more than 8 billion devices. Samsung has opted to deploy Corning Gorilla Armor 2 cover material for its latest Galaxy S25 Ultra devices.Despite some weakness in the Life Sciences segment, Corning is aiming to gain a competitive edge through enhancing product quality, offering a broad product suite and supply chain efficiency. However, companies like Danaher and Avantor continue to give competition in multiple end markets.GLW Benefits From Growing Client BaseCorning has joined forces with GlobalFoundries to create a detachable fiber connector solution for GF’s silicon photonics platform. During this venture, GlobalFoundries will leverage Corning’s GlassBridge solution, a glass-waveguide-based edge-coupler to match the high bandwidth requirements of AI data centers.Major telecom player Lumen accelerated its network expansion effort to match surging AI demand. It is sourcing next-generation fiber optic cable from Corning, driving growth in the Optical Communications segment. In the second quarter, GLW witnessed 16% year-over-year net sales growth in the carrier business.The company has also formed a collaboration with the industry leader in leading-edge solid-state lithium-metal battery technology, QuantumScape. The collaboration will focus on developing ceramic separator manufacturing capabilities for QuantumScape solid-state batteries.Estimate Revision TrendEarnings estimates for Corning for 2025 and 2026 have increased over the past 60 days.Image Source: Zacks Investment ResearchKey Valuation Metric of GLWFrom a valuation standpoint, GLW is currently trading at a discount compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 30.66 forward 12-month earnings, lower than 34.27 for the industry.Image Source: Zacks Investment ResearchEnd NoteCorning is witnessing healthy traction in mobile consumer electronics, display, automotive and optical communications verticals. Strategic collaboration with major industry leaders is driving innovation and expanding its customer base. The positive estimate revision portrays bullish sentiments about the stock’s growth potential. Hence, with an attractive valuation and a Zacks Rank #2 (Buy), Corning appears to be a good investment option right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Danaher Corporation (DHR): Free Stock Analysis Report Corning Incorporated (GLW): Free Stock Analysis Report CommScope Holding Company, Inc. (COMM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks