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Corning Rides on Strength in Optical Communication: Will it Persist?
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Key Takeaways
Corning's Optical Communications revenues hit $1.56B in Q2, up 41% year over year.
Enterprise network sales grew 81% and shipping of data center products doubled in Q2 compared to Q1 levels.
AI-driven demand and carrier fiber expansion are set to boost Corning's growth.
Corning Incorporated (GLW - Free Report) is benefiting from healthy traction in the Optical Communications segment. The company generated $1.56 billion in revenues from this segment in the second quarter, registering impressive growth of 41% year over year. In the second quarter, the company’s enterprise network business grew a staggering 81% year over year. Corning started to ship data center products in Q1, and its sales almost doubled in the second quarter.
There are several secular drivers of the fiber optic solutions business. The growing usage of mobile and IoT devices requires efficient data transfer and networking systems. Enterprises across industries are using high bandwidth intensive cloud and AI native applications. The vast amount of data generated in operations is used for training AI models. This is driving demand for robust networking architecture. Amid this backdrop, Corning’s portfolio, which consists of optical fiber, hardware, cables and connectors, enables it to create optical solutions to meet evolving customer needs.
Growing usage of optical connectivity products for generative AI applications is expected to be a key growth driver for Corning in the upcoming quarters. Moreover, plans of expanding fiber infrastructure from several of GLW’s carrier customers are also expected to drive revenue growth. Per our estimate, the company is expected to generate $6 billion in revenues in 2025 from the Optical Communications segment, indicating growth of 29.3% year over year.
How Are Competitors Faring?
Corning faces competition from CommScope Holding Company, Inc. (COMM - Free Report) and Amphenol Corporation (APH - Free Report) . With around 11,000 patents and patent applications, CommScope holds a dominant position in the communication infrastructure industry. Its research and development initiatives are primarily focused on capitalizing on high-growth opportunities like fiber optic connectivity for fiber-to-the-x and data centers, Wi-Fi 7 and 6GHz, DOCSIS 4.0, gigabit passive optical network, and metro cell and small cell wireless solutions. The company is benefiting from solid demand trends in the Connectivity and Cable Solutions segment, whose revenues rose 20.2% year over year to $875.4 million.
The growing use of AI and machine learning applications is driving demand for Amphenol’s high-speed power and fiber optic interconnect solutions. Amphenol is witnessing solid traction in its Communications Solutions segment. The segment generated $2.91 billion in revenue in the second quarter, up 101.4% year over year.
Image: Bigstock
Corning Rides on Strength in Optical Communication: Will it Persist?
Key Takeaways
Corning Incorporated (GLW - Free Report) is benefiting from healthy traction in the Optical Communications segment. The company generated $1.56 billion in revenues from this segment in the second quarter, registering impressive growth of 41% year over year. In the second quarter, the company’s enterprise network business grew a staggering 81% year over year. Corning started to ship data center products in Q1, and its sales almost doubled in the second quarter.
There are several secular drivers of the fiber optic solutions business. The growing usage of mobile and IoT devices requires efficient data transfer and networking systems. Enterprises across industries are using high bandwidth intensive cloud and AI native applications. The vast amount of data generated in operations is used for training AI models. This is driving demand for robust networking architecture. Amid this backdrop, Corning’s portfolio, which consists of optical fiber, hardware, cables and connectors, enables it to create optical solutions to meet evolving customer needs.
Growing usage of optical connectivity products for generative AI applications is expected to be a key growth driver for Corning in the upcoming quarters. Moreover, plans of expanding fiber infrastructure from several of GLW’s carrier customers are also expected to drive revenue growth. Per our estimate, the company is expected to generate $6 billion in revenues in 2025 from the Optical Communications segment, indicating growth of 29.3% year over year.
How Are Competitors Faring?
Corning faces competition from CommScope Holding Company, Inc. (COMM - Free Report) and Amphenol Corporation (APH - Free Report) . With around 11,000 patents and patent applications, CommScope holds a dominant position in the communication infrastructure industry. Its research and development initiatives are primarily focused on capitalizing on high-growth opportunities like fiber optic connectivity for fiber-to-the-x and data centers, Wi-Fi 7 and 6GHz, DOCSIS 4.0, gigabit passive optical network, and metro cell and small cell wireless solutions. The company is benefiting from solid demand trends in the Connectivity and Cable Solutions segment, whose revenues rose 20.2% year over year to $875.4 million.
The growing use of AI and machine learning applications is driving demand for Amphenol’s high-speed power and fiber optic interconnect solutions. Amphenol is witnessing solid traction in its Communications Solutions segment. The segment generated $2.91 billion in revenue in the second quarter, up 101.4% year over year.
Corning's Price Performance, Valuation & Estimates
Corning’s shares have gained 81.2% compared to the communications components industry’s growth of 82.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, the company’s shares currently trade at 26.48 forward 12-month earnings, lower than the industry.
Image Source: Zacks Investment Research
Earnings estimates for Corning for 2025 and 2026 have increased over the past 60 days.
Image Source: Zacks Investment Research
Corning currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.