GLW Stock Could Ride The AI Data-Center Buildout, Jefferies Says: Sees Corning’s Optical Business Scaling In 2028

• Jefferies identified progress in next-generation pluggable optics and co-packaged optics as potential catalysts.
• However, the firm expects Corning’s Photonics business to ramp up more slowly.
• It initiated coverage of GLW stock with a ‘Buy’ rating and a $134 price target, implying a potential upside of 19% from Tuesday’s close.

Corning (GLW) shares jumped in early morning trading on Wednesday after Jefferies initiated coverage of the stock with a ‘Buy’ rating, betting that AI data centers will keep demand for its fiber high.

Jefferies set a $134 price target, according to a note to investors cited by TheFly. The target implies a potential upside of 19% from Tuesday’s closing price. 

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GLW stock rallied as much as 7% in pre-market trade. On Stocktwits, retail sentiment remained in ‘neutral’ territory over the past day. The uptick comes after a rough stretch for the shares, which have fallen about 40% over the last six months.

AI Data-Center Demand Will Support Corning’s Fiber Business

Jefferies said multi-year contracts with hyperscalers and telecommunications carriers provide support for Corning’s growth outlook.

The firm expects Corning’s Optical business to begin scaling up in 2028, as fiber moves beyond connecting machines and becomes increasingly integrated into data-center equipment, according to Investing.com. It added that growth in the Enterprise and Carrier segments should also help the company make progress toward its 2030 targets.

The firm was more cautious about Corning’s Photonics business, which it expects to ramp up more gradually. It said clearer progress in next-generation pluggable optics and co-packaged optics could serve as the “key catalyst” for the stock. 

Not Everyone On Wall Street Is As Upbeat

On Tuesday, Bernstein lowered its price target on Corning to $120 from $140 while maintaining a ‘Market Perform’ rating, as per TheFly. GLW stock fell about 3% that day amid broader market weakness after consumer inflation numbers came in hotter than expected.

Several other firms also reduced their price targets following Corning’s third-quarter results last month. UBS lowered its target to $192, and Truist cut its target to $175, but both firms retained their ‘Buy’ ratings. Morgan Stanley reduced its target to $155 and maintained an ‘Equalweight’ rating.

In Q3, Corning reported adjusted earnings of $0.91 a share, above analysts’ estimates of $0.88. Revenue rose about 19% year-over-year to $5.08 billion, also topping expectations, with growth in optical communications contributing to the increase.

On Koyfin, the average 12-month price target stands at $177.35, implying roughly 58% upside from Tuesday’s close. Of the 18 analysts covering the stock, 14 have ‘Buy’ or ‘Strong Buy’ ratings, while four rate it a ‘Hold.’ 

Read also: CoreWeave May Benefit From Blue Wave’s Potential Data Center Slowdown, Analyst Says Ahead of Q3 Results

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