Corningis the IBD Stock of the Day as Wall Street zooms in on its optical communications business amid fast growing demand for artificial intelligence infrastructure in data centers. Corning stock has climbed 52% in 2024, with shares rising following an upbeat analyst day on Sept. 19.
On the stock market today, Corning stock rose 0.8% to close at 46.83.
Further, Corning stock trades in a buy zone from a 45.60 cup-with-handle entry point.
The Corning, N.Y.-based company has been best known for its Gorilla Glass used in Apple iPhones and other smartphones, but the display business's growth has slowed.
Analyst Day Boosts Corning Stock
At a Sept. 19 analyst day in Concord, N.C., the company touted emerging technologies in its optical communications business. Corning also showcased an industry leading optical fiber manufacturing facility.
"With so many years of having a diverse R&D strategy, Corning has been able to scale one of its 'hidden gems' that is expected to enable a diverse set of customers with implementing leading-edge AI compute infrastructure, while also enabling 'fiber to the home in remote areas' throughout the U.S.," Susquehanna analyst Mehdi Hosseini said in a report.
Barclays analyst Tim Long also had an upbeat view.
"The facility highlighted Corning's expanding optical portfolio, strategy to repurpose and reuse core technologies to service multiple end markets, and proprietary manufacturing capabilities," Long said in a report. "Impressively, the facility we toured is the world's largest and lowest cost optical-fiber production facility, highlighting GLW's focus on cost and productivity optimization without sacrificing innovation."
Display Business A 'Black Box'?
Jefferies analyst George Notter offered a more cautious view of the overall business. In the internet data center business, Notter noted increased demand for fiber-optic cabling used to connect computer servers and networking gear.
However, Notter was more guarded on the specialty glass business.
"The display (business) is still a black box — where's the profitability coming from ?," he said.
In the June quarter, adjusted earnings rose 4% to 47 cents per share. Corning had been unprofitable the previous seven quarters. Revenue came in flat at $3.25 billion.
For the September quarter, analysts model adjusted EPS growth of 17% to 53 cents per share, with revenue growing 7% to $3.71 billion.
Corning Stock Technical Ratings
Dividend-paying Corning stock holds an IBD Composite Rating of 81 out of a best-possible 99, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
Further, Corning stock has an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Further, Corning operates five businesses: optical communications, display technologies, specialty materials, environmental technologies and life sciences.
Meanwhile, Corning garners about 35% of revenue from optical communications and less than a quarter from specialty glass built into notebook computers, flat panel desktop monitors, display televisions, and other information display applications.
Some analysts expect upside from sales of higher margin specialty glass products to Asia-based BOE Technology Group. BOE is a leading display panel manufacturer worldwide.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
