Why did the stock with the most certain revenues in AI lose almost half its value?
Meta, Nvidia, Amazon, Verizon and now AT&T. Corning has signed contracts for years ahead, yet its stock is 44% below its high. Who is actually paying for the AI boom and what is left of the premium?
Key points
Corning signed billion-dollar deals with AT&T and Verizon in a single month, yet its stock ended the month lower.
Lead times for data center fiber exceed 60 weeks, and the telcos only got in line at the very end.
Management talks about sharing risk with customers, but the September 11 move showed who really finances the expansion.
Besides the famous 20-30-40 plan, there is also a quieter version with a number five billion dollars lower.
Analyst price targets range from $129 to $243, and the Bulios model adds a third, significantly stricter view.
Two mega-deals in a month and the stock still falls
The company announces two billion-dollar contracts in a single month, and its stock still finishes the month lower than it started. That is exactly what happened to Corning $GLW. Telecommunications giant AT&T signed a multi-year agreement with it on September 29 worth more than $3 billion for optical fiber and cables that should bring fast internet to 60 million Americans by the end of 2030.
Just three weeks earlier, Verizon announced its own multi-billion-dollar contract for more than 80 million miles of fiber with deliveries from 2027 to 2032.
The market reacted typically: the stock jumped on September 29 and closed at $158.71, only to give back most of the gain the next day. Bernstein analyst Daniel Zhu initiated coverage with a neutral rating and a $140 price target, below the current price. Corning closed September at $153.76, about 44% below the July high of $271.78.
Chip stocks are holding, hyperscalers are investing record amounts, and the company with the most visible future revenues in the entire AI chain has lost almost half its value. Something doesn't add up. Or maybe it adds up all too well.