According to Woofun AI, the price of specialized optical fiber for AI data centers has surged more than fivefold this year compared to 2024 levels. Corning (GLW.US) holds a pivotal position in the industry’s supply-demand imbalance due to its $6 billion supply agreement with Meta (META.US).
The supply-demand gap is profoundly reshaping the industry landscape. TrendForce predicts a shortfall of 180 million fiber-kilometers in global fiber optic supply this year, with this tightness potentially lasting until 2028. Data compiled by Woofun AI shows that current industry capacity utilization has reached 92%, inventories are sufficient for only one month of supply, and expansion cycles take 18 to 24 months.
Under this context, Corning's (GLW.US) optical communications business saw strong revenue growth of 32% to $2.07 billion in the second quarter, with net profit surging 77% to $438 million.
In response to market skepticism, management clarified its profit-driving logic. During the July earnings call, in addressing concerns raised by Wolfe Research analyst George Notter regarding price surges and reliance on long-term agreements, Corning (GLW.US) CEO Wendell Weeks emphasized that higher-value connectivity products—not merely rising fiber prices—are the true drivers of improved profitability. These products enable customers to build networks more quickly and at lower cost. Corning’s agreement with Meta (META.US) extends through 2030 and covers fiber, cable, and connectivity products, with Meta set to be the primary customer for Corning’s expanded cable facility in North Carolina, providing stable demand to support capacity ramp-up.
The capital market shows significant divergence in its outlook for Corning (GLW.US). Despite strong demand, its stock price has declined nearly 50% since hitting an all-time high in June. UBS (UBS.US) maintains a "Buy" rating and raised its price target to $201, Citigroup (C.US) set a target of $220, while Bernstein cautiously assigned a target of $140. Polymarket data shows traders assign only a 28% probability to Corning (GLW.US) generating over $2.3 billion in revenue from its optical communications segment in Q3, with related trading volume at $3,500;
Meanwhile, the probability of a downturn in the AI industry is priced at 9%, with trading volume exceeding $3 million. Meta (META.US) will release its earnings on Wednesday, October 21, followed by Corning (GLW.US) on October 27.