This Under-the-Radar Semiconductor Equipment Supplier Crushed Nvidia Last Year

Developing artificial intelligence (AI) requires immense computational power, primarily housed in sprawling data centers. Nvidia’s AI chips have established themselves as the backbone of this infrastructure, driving extraordinary demand. In 2025, Nvidia’s stock surged by 39%, buoyed by this relentless demand. However, another, less-heralded semiconductor stock outperformed Nvidia—meet Corning.

Corning: The Unsung Hero of Fiber Optics

Corning (GLW) is perhaps best known for supplying glass to Apple’s iPhone since 2007. However, it made headlines recently with its stock skyrocketing by 84% last year. This impressive leap can be attributed not only to its long-standing partnerships but also to the growing demand for fiber optic cables used in data centers. These cables offer significantly higher data transmission speeds compared to traditional copper cables, crucial for matching the performance of modern AI applications.

The Fiber Optic Revolution

The evolution from copper to fiber optics is not merely a trend; it represents a critical shift in data center technology. A typical hardware stack for AI workloads includes an array of components—graphics processing units (GPUs), central processing units (CPUs), high-bandwidth memory, and more. With the increasing size and complexity of AI workloads, ensuring that data travels quickly among these components becomes paramount.

For instance, a single Nvidia Blackwell NV-Link data center node can feature around 2 miles of copper cabling connecting 72 GPUs to other components. Corning’s CEO Wendell Weeks indicates that the industry is swiftly moving towards fiber optics, which can transmit data more rapidly and efficiently over greater distances without significant data loss. With data centers expanding to accommodate the growing demands of AI developers, the market for optical fiber cables is poised to double or even triple.

Corning’s Stellar AI-Related Growth

Corning is set to announce its operating results for the final quarter of 2025 on January 28, with core revenue forecasts around $4.35 billion. This would bring the annual total to $16.3 billion, marking a 13% increase from the previous year. Notably, this accelerated growth stands in stark contrast to the 7% growth reported in 2024 and is predominantly driven by their optical communications segment.

In the third quarter alone, Corning’s core revenue grew by 14% year over year to reach $4.27 billion. Within that framework, the optical communications segment shone brightly, seeing revenue swell by 33% to $1.65 billion. Particularly noteworthy is the enterprise optical communications revenue growth, which exploded by an astounding 58%, fueled by robust demand linked to AI applications.

Robust Financials Heralding Even More Growth

When we examine Corning’s financial results, the narrative of growth becomes even clearer. In the third quarter, the company reported a core net income of $585 million—a 26% year-over-year increase—where the optical communications segment contributed a significant $295 million, growing at an even faster 69%. This surge in demand for AI-related cables and infrastructure has given Corning remarkable pricing power, thereby enhancing its profit margins significantly.

Attractive Valuation Amidst Industry Rivals

Corning’s stock is currently positioned at a price-to-earnings (P/E) ratio of 36.9, which is considerably more attractive compared to other semiconductor players like Nvidia, Advanced Micro Devices, and Broadcom, with their P/E ratios hovering around 46.7, 56.3, and 50.3, respectively. This persisting valuation gap suggests that Corning remains a hidden gem within the semiconductor sector.

Intel’s ongoing commitment to data center infrastructure upgrades could result in a staggering $4 trillion annual expenditure by 2030, as estimated by Nvidia CEO Jensen Huang. Major companies like Meta Platforms and Microsoft are now building colossal clusters utilizing 100,000 GPUs, while xAI, helmed by Elon Musk, aims for a cluster featuring 1 million GPUs.

With these developments, it’s evident that demand for Corning’s fiber optic cables is only set to increase. For investors seeking a less conventional pathway into the booming AI market, Corning represents a tantalizing opportunity.