Is Corning Inc a Buy After Its Latest Earnings Report?

Corning (NYSE:GLW) investors have been on a wild ride in recent years, and the volatility shows no signs of abating. Since the dawn of artificial intelligence (AI) in early 2023, the stock has climbed as much as 700%, as demand for its optical connectivity has skyrocketed. During the same period, the stock has fallen more than 10% on at least seven different occasions and fallen 25% or more three times.

The company delivered its financial report today, and investors were not pleased. The stock plunged as much as 20% in the wake of its report, and has now lost half its value -- even after it beat investor expectations.

Let's take a look at the details to see if the stock is a buy on the heels of its latest report.

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By the numbers

For the second quarter, Corning delivered revenue of $4.5 billion, up 17% year over year, resulting in earnings per share (EPS) of $0.64, an increase of 19%. On an adjusted basis, sales of $4.7 billion climbed 17%, while its EPS jumped 30% to $0.78.

For context, analysts' consensus estimates called for adjusted revenue of $4.63 billion and adjusted EPS of $0.76.

For the third quarter, Corning is forecasting adjusted sales of $4.9 billion to $5 billion, or 16% year-over-year growth, and adjusted EPS of $0.87, both at the midpoint of its guidance. This was mostly in line with Wall Street's expectations. Investors seemed disappointed that management didn't issue a more robust forecast, and the sell-off was both swift and severe. That doesn't necessarily mean it was warranted.

Corning's long-term growth plans remain ambitious. CEO Wendell Weeks said the company plans to grow its annualized sales run rate to $20 billion by the end of 2026, $30 billion by the end of 2028, and $40 billion by the end of 2030.

The need for speed remains

One of the hallmarks of AI processing is the ever-growing need for speed. To address the need for real-time or near-real-time responses, the models need to provide answers before users lose interest. In more critical AI-powered applications -- including cybersecurity detection and autonomous driving -- delayed responses or processing can have devastating effects.

In an increasingly AI-centric world where every second counts, data center operators are increasingly switching from legacy copper cables to fiber optics, which are significantly faster for data transfer. Some estimates suggest that optical fiber can carry data between 2,500 and 25,000 times faster than copper. Moreover, signals sent over copper wire tend to degrade over longer distances, making optical fiber the clear choice. Demand for data center optical fiber grew 76% in 2025 and is expected to account for 30% of total global fiber demand by 2027, compared to just 5% in 2024.

Corning is the leading provider of fiber-optic cable in the U.S. and one of the top providers worldwide, so the company is well positioned to benefit from this growing demand.

Earlier this year, Corning inked a multiyear partnership with Nvidia to help meet the unprecedented demand. Corning is building three new advanced manufacturing facilities in Texas and North Carolina, which will increase its optical connectivity capacity 10-fold. The partnership with Nvidia included a $500 million investment in Corning and multi-billion-dollar prepayments to help fund its construction efforts. That marks a significant vote of confidence from the AI leader.

Is the stock a buy?

Corning has been one of the undeniable beneficiaries of the secular tailwinds highlighted above, but that has been a two-edged sword. After today's financial report, the stock is still selling for 58 times earnings and 38 times forward earnings. A valuation of that magnitude might lead some investors to take a hard pass.

On the other hand, the most commonly used valuation methods don't account for the company's ambitious growth. Using the more appropriate price/earnings-to-growth (PEG) ratio returns a multiple of 0.19, when any number less than 1 is the standard for an undervalue stock.

The wildcard, of course, is the continuing adoption of AI. If you believe, as I do, that demand for AI will continue for years to come, then Corning's price reset represents an intriguing buying opportunity.

Danny Vena, CPA has positions in Nvidia. The Motley Fool has positions in and recommends Corning and Nvidia. The Motley Fool has a disclosure policy.