Key Points
On Monday, Amazon (NASDAQ: AMZN) handed an old-line glassmaker one of its biggest endorsements yet in the AI build-out. The cloud and e-commerce giant announced a multiyear, multibillion-dollar agreement to buy the optical fiber and connectivity that will wire its expanding U.S. data centers from Corning (NYSE: GLW) — a deal expected to create 1,000 manufacturing jobs at the company’s North Carolina plants. Shares of the 175-year-old glassmaker jumped as much as 10% on the news.
Lately, that kind of headline has become routine, even as most of the AI spotlight stays on the chipmakers. Corning was founded in 1851 and has made the glass for everything from Thomas Edison’s early lightbulbs to the iPhone. Now its fiber — the strands that shuttle data between the thousands of chips inside an AI data center — has turned it into one of the quieter beneficiaries of the spending wave. And the stock has more than doubled this year, rising 114%.
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So, is there still a case for the shares after a run like that?
Image source: Getty Images.
A string of hyperscale wins
The Amazon agreement isn’t a one-off. In January, Meta Platforms agreed to buy up to $6 billion of optical solutions from Corning over several years for its own AI data centers. Then, in May, Nvidia named Corning its optical partner for next-generation AI infrastructure — a multiyear deal under which Corning will expand its U.S. optical connectivity capacity tenfold and build three new plants in North Carolina and Texas. Nvidia is putting $500 million behind the partnership and holds warrants that could lift its total investment to as much as $3.2 billion.
Moving data inside an AI data center over glass rather than copper is faster and uses less power, and the number of connections required keeps climbing as these clusters grow. And Corning’s newest product, Multicore Fiber, packs four light-carrying cores into one strand — four times the density of a standard single-core line — which the company says lets data center operators get the same capacity with up to 75% fewer connectors.
Highlighting the company’s momentum in this AI build-out, Corning’s optical communications sales rose 36% year over year in Q1 to about $1.85 billion — an acceleration from 24% growth in the fourth quarter of 2025. It was the company’s eighth straight quarter of year-over-year growth.
In the company’s first-quarterearnings call CEO Wendell Weeks said the wave of new agreements is driving “expansion across all of our major optical operations, including expanding our fiber operations.”
Further, at a May investor event, Corning extended its long-range plan and is targeting a $40 billion annualized sales run rate by the end of 2030 — up from a $20 billion annualized sales run rate it expects to reach by the end of 2026.
A high price to pay
All of this momentum has led to a strong business. First-quarter core earnings per share — the company’s non-GAAP (adjusted) measure — grew 30% year over year, and core operating margin reached 20.2%, a level the company hit a full year ahead of its own schedule. And for all of 2025, adjusted earnings per share grew 29%.
What gives me pause, however, is what investors are now paying for that growth. After more than doubling in 2026, Corning trades at a price-to-earnings ratio of about 90 as of this writing — a rich multiple that arguably already assumes years of similarly strong growth.
And there are reasons for caution beyond the valuation. First, the financial terms of the Amazon and Nvidia agreements weren’t disclosed, so the revenue and timing remain unclear. Additionally, Corning’s fortunes are increasingly tied to a single, capital-intensive cycle — hyperscalers’ AI spending. While it doesn’t look like this build-out will slow anytime soon, investors shouldn’t rule out the possibility of a surprise slowdown.
Still, a small position here could make sense. Because just as investors should acknowledge the risks, there’s also the possibility that the AI build-out runs hotter and longer than expected. For investors willing to venture into the optical side of the AI trade rather than the chips, Corning is arguably a solid investment idea, albeit a risky one given the stock’s high valuation.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Corning, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
