Corning, the glass company, was an AI play for like three weeks
In an interesting turn of events, a glass company founded by actress Katherine Hepburn’s great grandfather became an AI play earlier this month.
Remember how utilities were an AI play, because of the power demand from data centers?
Well, those data centers need a lot of fiber-optic cables to connect all the high-powered tech. Enter Corning.
On July 8, the company boosted its revenue forecast for the second quarter, highlighting “the strong adoption of our new optical connectivity products for Generative AI.”
The stock spiked 12%.
This morning, Corning reported earnings that it effectively pre-reported back on July 8, so the focus was more on what was coming next.
Cue the letdown, as the sales forecast from management was a little below Wall Street’s estimate. And all of that rally – as well as the followthrough over the next week – was erased in trading early on Tuesday morning.
To be fair, the AI-related numbers were strong – with enterprise sales in Corning’s Optical Communications segment up 42% year-on-year, and management expecting the business to grow at a compounded annual rate of 25% through 2027.
There’s a lesson here about managing expectations. If Corning’s management hadn’t gotten investors so hyped about how well the second quarter had gone, they probably wouldn’t have had such high hopes for the future.
To be fair, the AI-related numbers were strong – with enterprise sales in Corning’s Optical Communications segment up 42% year-on-year, and management expecting the business to grow at a compounded annual rate of 25% through 2027.
There’s a lesson here about managing expectations. If Corning’s management hadn’t gotten investors so hyped about how well the second quarter had gone, they probably wouldn’t have had such high hopes for the future.
