Corning: AI Sales Taking Shape

Core Viewpoint - Corning Incorporated is experiencing a positive growth outlook driven by demand for optical connectivity products related to Generative AI, with a significant increase in share price by 31.29% since early May [1] Financial Performance - For Q2, Corning anticipates core sales of approximately $3.6 billion, up from a previous estimate of $3.4 billion, with core EPS growth expected to exceed the range of $0.42 to $0.46 [1] - The company projects an additional $300 million in turnover, raising total sales estimates to $14.1 billion, with a core operating profit increase from €2.52 billion to €2.6 billion [3] Growth Drivers - Corning's "Springboard" framework is expected to contribute over $3 billion in annualized top-line sales over the next three years, with a medium-term earnings lift anticipated [2] - The optical segment is projected to reach $4-5 billion in sales, representing 40% of total turnover, driven by a 25% CAGR in data center growth over the next five years [2] Valuation - The target price for Corning's shares is set at $36 based on a P/E multiple of 16x, with potential to reach $55 per share using a sector median FWD P/E of 24.5x, indicating the company is currently undervalued [4] Market Position - Corning holds a leading position in technical glass, with optical fiber accounting for 30% of sales and display glass (TVs) representing approximately 26% of sales [2]