UBS has revised its valuation of Corning Inc (NYSE: GLW), increasing its price target to $160 from $125 while retaining a buy rating. The firm attributed the change to a significant uplift in capital expenditure plans from major data center hyperscalers, which it expects will lift demand for Corning's fiber-optic glass products tied to the buildout of AI infrastructure.
The analysts framed the upgrade around the data-intensity of artificial intelligence workloads, noting that the massive volumes of information generated by AI applications are transmitted over fiber-optic cabling. As a long-standing manufacturer of specialty glass, Corning stands to gain from the higher spending announced by large technology companies named by UBS, including Meta, Microsoft and Amazon.
A central element of Corning's near-term outlook is a recently disclosed $6 billion arrangement with Meta Platforms that UBS describes as an "anchor agreement." The firm emphasized the strategic value of that contract: it provides Corning with forward visibility into demand, a degree of revenue certainty and upfront cash inflows that can be deployed to expand capacity and construct new manufacturing facilities to meet hyperscaler requirements.
UBS highlighted Amazon (AMZN) as another key data point, citing the company's capex guidance of $200 billion, which the analysts said is roughly 33% higher than earlier expectations. Based on these and other hyperscaler signals, UBS projects hyperscale spending will accelerate to 68% year-over-year growth in 2026.
The bank's research note also draws a distinction between current fiber applications and a potential large new market shift. Today, fiber is widely used to link separate server racks in what is commonly called "Scale Out." UBS expects Corning to benefit if hyperscalers pursue a move toward replacing copper wiring inside individual server racks with fiber-optic cable - a transition the analysts term "Scale Up." They estimate the "Scale Up" opportunity could be two to three times larger than the existing "Scale Out" market and that demand tied to this conversion is in the early stages and could stay elevated into the mid-2030s.
On valuation, UBS applied a 33x next-twelve-months price-to-earnings multiple - described as a modest discount to the broader optical peer group - to arrive at the $160 target. The analysts' model incorporates an expected 30% compound annual growth rate in adjusted earnings per share through 2028, a pace that UBS says shifts Corning out of a "low single-digit" growth profile into a high-growth infrastructure exposure.
Investors will be watching execution against the Meta agreement, the timing and scale of factory expansion plans, and whether hyperscaler capex continues at the elevated rates UBS anticipates. Those variables will determine how quickly the projected demand for both "Scale Out" and "Scale Up" fiber products translates into revenue and earnings realization for Corning.
Note: The article reports UBS analyst conclusions and Corning's announced agreements and guidance as presented in UBS's research and company statements.