Episode
Corning (GLW): A Genuine Beat That Fell 15% — Is the AI Optical Sell-Off a Gift?
- Published
- Jul 29, 2026
- Duration seconds
- 817
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Summary
Corning Incorporated (GLW) Q2 2026 — Corning (GLW), the 175-year-old materials-science company that now supplies the optical fiber and connectivity wiring AI data centers, reported Q2 2026 (quarter ended June 30, 2026) before the open on July 28 — and beat. Core EPS of $0.78 topped the $0.75 consensus and rose 30% YoY; core sales of $4.74B beat $4.63B and grew 17%, the ninth straight quarter of YoY growth. Quality improved too: core gross margin +120 bps to 39.6%, core operating margin +190 bps to 20.9%, core ROIC 14.9%. Optical Communications did the heavy lifting — sales +32% to $2.07B (44% of the company) with segment net income +77%, and Enterprise Networks (the data-center piece) up 65%. In the quarter Corning signed a long-term NVIDIA partnership to expand U.S. optical-connectivity capacity 10x and a multiyear, multibillion-dollar Amazon deal. Cash is real: $1.72B operating cash flow and $1.42B adjusted free cash flow, with a $0.28 quarterly dividend and ~$6.4B net debt against $1.7B of quarterly operating cash. And the stock still fell about 15% at the open, from $143.36 to roughly $122 — because Q3 guidance (core EPS $0.85-0.89, sales $4.9-5.0B) landed merely in line, optical is effectively sold out until new capacity ramps in 2027, and GLW was one of the most crowded AI-infrastructure trades on the tape after a ~190% run to a June high near $272. Our owner-earnings DCF on a ~$3.5B/yr base, blending a steady +11%/yr path and the +19%/yr Springboard path at a 9% discount rate, lands fair value near $155 versus ~$122 today — roughly 27% upside, with the market effectively paying only the steady case. Our call: BUY, 3/5 — the pullback is the gift, but it is still a premium multiple on a business whose near-term growth is capacity-gated. Wall Street rates GLW a Buy…