Corning’s Optical Sales Surge 36% with $6B Meta Deal, P/E Reaches 48x
APH•Corning's Q1 core sales rose 18% to $4.35B, led by 36% optical segment growth and a $6B Meta deal, while solar sales jumped 80% and core EPS climbed 30% to $0.70. Shares trade at 48x forward earnings, double the three-year average, risking compression if optical growth slows or smartphones decline.
1. Q1 Revenue and Profit Growth
Corning reported Q1 core sales of $4.35 billion, up 18% year-over-year. Core EPS rose 30% to $0.70, gross margins expanded by 120 basis points to 39.1%, operating margins improved by 220 basis points to 20.2%, and Q2 sales are guided to $4.6 billion.
2. AI Infrastructure Tailwinds
The Optical Communications segment jumped 36% to $1.8 billion, fueled by high-density AI data center demand. Corning secured a $6 billion multi-year agreement with Meta and two similarly sized hyperscaler deals, validating its role as a primary AI infrastructure enabler.
3. Glass Innovations Drag
The Glass Innovations segment, representing 32% of revenue, grew just 1% year-over-year as global smartphone shipments are forecast to decline 7%–15% in 2026. Weakening smartphone volumes threaten high-margin Gorilla Glass, potentially offsetting AI-driven gains.
4. Elevated Valuation Risks
Shares trade at 48x forward earnings, nearly double the three-year average of 21x, reflecting aggressive pricing of AI growth. Any slowdown in optical expansion below 25% or deeper smartphone weakness could trigger a meaningful multiple contraction, with analysts’ average price implying only 10% upside.
