Is This Surging Semiconductor Stock a Buy After Its Blockbuster Deal With Nvidia?

Corning (NYSE: GLW) is one of America's oldest companies. It was founded in 1851, and it has manufactured glass for some of the world's most revolutionary products, including Thomas Edison's original lightbulb and Apple's iPhone.

But Corning stock has rocketed higher by 340% during the past year because of the company's advanced fiber-optic cables for data centers, which are in high demand from the artificial intelligence (AI) industry because they can transmit information between chips and components significantly faster than traditional copper alternatives.

Corning has signed several multibillion-dollar deals with hyperscale data center operators in 2026 alone. But on May 6, the company announced a new partnership with Nvidia (NASDAQ: NVDA), which could see its optical connectivity manufacturing capacity increase as much as 10-fold during the next few years. With that in mind, is there still time to buy Corning stock?

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The Nvidia deal is a game changer

Nvidia supplies the world's best graphics processing units (GPUs) for data centers, which are the main chips used in AI development. Customers often configure them using the company's NVLink-72 data center rack, which includes 72 GPUs, 36 central processors (CPUs), and advanced networking equipment.

Those components are connected using two miles of copper cables, which increasingly face limitations in both speed and energy efficiency as the latest AI models demand record amounts of processing power. Optical fiber has been proven to transmit data much faster and over longer distances than copper, with minimal data loss, quickly making it the material of choice.

Earlier this year, Corning launched a new product called Multicore Fiber (MCF), which packs four cores into a single 125-micron fiber strand. Given it has four times the density of a single-core solution, Corning says data center operators can achieve the same performance using 75% fewer cables.

Since optical fiber is clearly the future of data center connectivity, it's no surprise Nvidia cut such a significant deal with Corning. But Nvidia isn't just a customer, because it has provided an undisclosed amount of funding to help Corning build three new manufacturing facilities. Plus, the chipmaker has the option to acquire a $3 billion equity stake in Corning.

Corning's AI-related revenue is already surging

Corning generated $4.3 billion in core revenue during the first quarter of 2026 (ended March 31), representing an increase of 18% from the year-ago period. The company's optical communications business contributed $1.8 billion in revenue, which grew at a much faster pace of 36%. That marked an acceleration from the 35% growth the segment generated in the fourth quarter of 2025, three months earlier, highlighting the momentum in optical fiber sales.

In fact, demand is so strong that Corning currently has significant pricing power, which is lifting its profit margins. The optical communications business produced $387 million in net income during the first quarter, which soared by 93% from the year-ago period. It accounted for more than half of Corning's total core net income of $612 million.

But this growth phase is just getting started. In January, Facebook parent Meta Platforms signed a deal to buy $6 billion worth of Corning's optical fiber solutions during the next few years, which it will use in its AI data centers. And during his first-quarter conference call with investors on April 28, Corning Chief Executive Officer Wendell Weeks said the company signed two more deals with hyperscale customers of similar size and scope to the Meta agreement.

When you add the Nvidia deal into that mix, Corning's optical communications business has a revenue pipeline that could be worth tens of billions of dollars.

Corning stock isn't cheap, but it might still be a buy

Based on Corning's adjusted (not in accordance with generally accepted accounting principles, or GAAP) trailing 12-month earnings of $2.69 per share, its stock is trading at a hefty trailing price-to-earnings (P/E) ratio of almost 90. For some perspective, that makes it substantially more expensive than Nvidia stock, which trades at a P/E ratio of 44.

However, Wall Street believes the company's incredible pipeline of deals could propel its earnings to $4.21 per share in 2027 (according to Yahoo! Finance), placing its stock at a forward P/E ratio of about 50. That still isn't necessarily cheap at face value, but if analysts forecast a similar rate of earnings growth in 2028 and 2029, then Corning stock might actually look like a bargain at the current price when investors look back on this moment.

Simply put, Corning stock might still be a great buy right now, but holding it for a period of at least three years might be the key to earning a positive return because of its high valuation.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Corning, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.