Corning (GLW) Stock Climbs 6% Following UBS Price Target Hike Driven by AI Fiber Demand

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TLDR

  • UBS increased its price target for Corning (GLW) from $125 to $160, retaining a Buy rating
  • The upgrade stems from 30–50% capital expenditure revisions by major hyperscalers such as Meta, Amazon, and Microsoft
  • Corning inked a $6 billion “anchor agreement” with Meta, offering revenue predictability and funding for new manufacturing facilities
  • UBS projects a 21% compound annual sales growth and 30% EPS growth for Corning through 2028
  • The emerging “Scale Up” fiber market—substituting copper within server racks—could be 2–3 times larger than the existing “Scale Out” market

Corning (GLW) shares rose 6.5% during midday trading on Friday after UBS significantly upgraded its outlook for the company.

GLW Stock Card

UBS analyst Joshua Spector lifted his price target for GLW from $125 to $160 while keeping a Buy rating intact.

The key driver behind the upgrade: hyperscalers are boosting spending, and Corning is at the center of this trend.

Spector highlighted “30–50% upward revisions in capex spending by leading hyperscalers” as the primary reason for his revised estimates. One hyperscaler recently guided for $200 billion in capex—approximately 33% higher than prior expectations.

UBS now expects hyperscale spending to grow 68% year-over-year in 2026.

This increased spending translates to more data flowing through expanded infrastructure—and greater need for fiber optic cables to carry it.

The $6 Billion Deal

Corning recently finalized a $6 billion agreement with Meta Platforms, labeled an “anchor agreement.”

The deal is more than a large revenue figure. It provides Corning with forward visibility into demand and upfront cash to fund new manufacturing capacity.

Spector noted he anticipates similar deals with other hyperscalers, which could help Corning further expand its market share.

“These contracts provide GLW with visibility into long-term demand growth and also have the potential to generate earlier cash inflows to fund investments, partially reducing risk for new capacity investments,” Spector wrote.

Scale Up: The Next Wave

Currently, fiber optic cables connect server racks to one another—a setup called “Scale Out.” Corning already operates in this space.

The next opportunity lies in “Scale Up”—replacing copper wires inside individual server racks with fiber. This is a newer, faster-growing market.

UBS estimates the Scale Up market could be two to three times larger than the current Scale Out market.

Demand for Scale Up solutions is seen as just beginning, with strong growth potentially extending into the mid-2030s.

Spector now forecasts Corning’s Optical segment will account for 55% of the company’s net income by 2028, up from its current level.

He projects a 21% compound annual sales growth and 30% adjusted EPS growth through 2028.

Despite the stock’s recent rally, UBS applied a 33x next-twelve-months P/E multiple—a slight discount to optical peers—to reach the $160 target.

Spector also noted that 2028 is unlikely to mark peak sales, as fiber demand is expected to remain above historical growth rates well into the mid-2030s.

He added there is potential for further estimate revisions following Nvidia’s upcoming update, stating he does not expect the current round of hyperscaler capex increases to be the last.