Meet the Brilliant AI Stock Obliterating Nvidia in 2026 With a Return of 44%
Nvidia (NVDA -4.22%) supplies the world’s best graphics processing units (GPUs) for data centers, which are the main chips used in artificial intelligence (AI) workloads. Since early 2023, the company has experienced more demand than it can possibly supply, which is why its market capitalization has ballooned from $360 billion to over $5.2 trillion as of this writing (Oct. 28).
But Nvidia is so large now that its best gains might be in the rearview mirror. In fact, its stock has returned just 16% so far in 2026. Many suppliers of other data center hardware components have performed much better this year, as the benefits of the AI infrastructure spending boom spread beyond the major chip makers.
Shares of Corning Inc (GLW -4.32%), for instance, have surged by 44% this year. The company has manufactured glass for some of the most innovative electronics since 1851, including Thomas Edison’s original lightbulb, and every single generation of Apple‘s iPhone. Today, Corning is at the center of the AI boom thanks to its fiber-optic data center cables, and here’s why its stock could deliver more upside over the long term.
Image source: Getty Images.
The transition to optical fiber represents a huge opportunity
GPUs are typically grouped together in a fully integrated data center rack, where they work with other components like central processing units (CPUs), high-bandwidth memory, and networking equipment to deliver the best processing speeds. The components in Nvidia’s NVLink 72 data center rack, which includes 72 GPUs, is connected using two miles’ worth of copper cables, but there is an ongoing transition to fiber-optic cables instead, because they deliver faster processing speeds and are more energy efficient.
Corning offers an entire portfolio of optical connectivity products for AI customers under a brand called GlassWorks AI Solutions. One of them is the new Multicore Fiber (MCF) cable, which packs four cores into a single 125-micron strand of fiber. That means MCF is four-times as dense as a traditional fiber-optic cable, so data center operators can achieve the same performance with 75% fewer cables.
Corning says clusters of over 130,000 GPUs will require an extra optical layer which adds around 50% more fiber content, so products like MCF will be the perfect solution as data centers get bigger.
Most of Corning’s top customers in the optical connectivity segment are hyperscalers. Meta Platforms, for example, plans to buy $6 billion worth of optical connectivity solutions from Corning over the next few years, and Amazon signed a purchase agreement worth a similar amount. Nvidia is also helping Corning with the funding and technical support it needs to grow its manufacturing capacity to help fulfill these large orders.
Corning’s revenue growth is accelerating
Corning generated $5.1 billion in core revenue during the third quarter of 2026 (ended Sept. 30), a 19% increase from the year-ago period. The optical communications segment contributed $2.4 billion in revenue, increasing at a much faster pace of 44%. Growth in both total revenue and optical communications revenue accelerated from the second quarter just three months earlier, highlighting the company’s significant momentum.
AI-related sales are the primary source of that momentum right now, growing by more than 100% year over year during the third quarter.
The soaring demand for optical connectivity solutions enables Corning to dictate prices, which is boosting its profit margins. As a result, third-quarter core net income from the optical communications business rocketed higher by 80% year over year to $532 million. It accounted for most of the company’s total profit of $795 million.
With its strong third-quarter result, Corning officially achieved $20 billion in annual run-rate revenue, a full quarter ahead of its forecasted timeline. But there could be significantly more growth ahead, because the company expects to achieve $30 billion in annualized revenue by the end of 2028, and then $40 billion by the end of 2030.
GLW – Corning
$123.31-$5.57 (-4.32%)
NYSE · As of 4:00 PM ET 10/30/26
Corning stock isn’t cheap, but it could be a great long-term buy
Based on Corning’s adjusted (non-GAAP) earnings of $3.11 per share over the last four quarters (to Sept. 30), its stock is trading at a price-to-earnings (P/E) ratio of 40.6. It’s materially more expensive than Nvidia stock which has a P/E ratio of just 27.5.
However, Wall Street’s average estimate (provided by Yahoo! Finance) suggests Corning could grow its adjusted earnings to $4.40 per share in 2027, placing its stock at a more reasonable forward P/E of 28.7. Further, if we assume the company will double its revenue by 2030 as management expects, its earnings are likely to experience a similar increase. That means its current stock price might seem like a bargain when investors look back on this moment in four years’ time.
As a result, Corning stock could be a great addition to a diversified portfolio, but it’s critical to maintain a long-term view.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.