Developing artificial intelligence (AI) requires a significant amount of computing power, which is why most of it happens inside enormous, centralized data centers. Nvidia's (NVDA +0.22%) AI chips power that infrastructure, and the company continues to experience more demand than it can supply. Its stock soared by 39% during 2025, but another semiconductor stock did even better.
Corning (GLW +1.68%) has supplied the glass for Apple's iPhone since 2007, but its stock rocketed higher by 84% last year because of surging demand for something else: its fiber optic cables for data centers, which move information between chips and devices much faster than traditional copper cables.
Corning predicts the addressable market for fiber optic cables will expand significantly because of AI, so here's why it's not too late to buy this stock in 2026.
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An important transition is underway
The typical data center hardware stack for AI workloads includes graphics processing units (GPUs), central processing units (CPUs), high-bandwidth memory, storage chips, switches, and more. Data must travel among all of those components as fast as possible so GPUs, which are the stars of the show, can operate at maximum efficiency. This accelerates processing speeds and minimizes costs.
A single Nvidia Blackwell NV-Link data center node contains around 2 miles of copper cable, connecting 72 GPUs to the other components in the stack. Corning says data center operators are quickly transitioning away from copper in favor of optical fiber, which can transmit data much faster and over much longer distances, while maintaining minimal data loss.
Nodes are also getting bigger to support the growing demand for computing power from AI developers, which means more GPUs and significantly more cabling. As a result, Corning CEO Wendell Weeks believes the optical fiber market for data centers could double or even triple in size from here.
Corning's AI-related revenue is soaring
Corning will report its operating results for the final quarter of 2025 on Jan. 28, with core revenue expected to come in at $4.35 billion. That will take its annual total to $16.3 billion, representing a 13% year-over-year jump -- a substantial acceleration over the 7% growth it generated in 2024. The strength is coming primarily from the company's optical communications segment.
During the third quarter, Corning's core revenue grew by 14% year over year to $4.27 billion. However, the optical communications segment, specifically, saw revenue surge by 33% to $1.65 billion.
If we zoom in even further, Corning's enterprise optical communications revenue rocketed by an eye-popping 58%, thanks to strong AI-related demand.
NYSE: GLW
Key Data Points
Turning to the bottom line, Corning delivered a core net income (profit) of $585 million during the third quarter, which was a 26% jump from the year-ago period. The optical communications segment accounted for $295 of that total, which grew at an even faster pace of 69%. Strong demand for AI-related cables and equipment is giving the company incredible pricing power, which is significantly boosting its profit margins.
Corning's attractive valuation paves the way for upside in 2026
Corning has delivered adjusted (non-GAAP) earnings of $2.38 per share over the last four reported quarters, placing its stock at a price-to-earnings (P/E) ratio of 36.9. Therefore, it's much cheaper than other semiconductor and equipment suppliers like Nvidia, Advanced Micro Devices, and Broadcom, which trade at P/E ratios of 46.7, 56.3, and 50.3, respectively.
According to Nvidia CEO Jensen Huang, data center operators could spend up to $4 trillion annually by 2030 on infrastructure upgrades to meet demand from AI developers. Companies like Meta Platforms and Microsoft have already built massive clusters using 100,000 GPUs, and Elon Musk's xAI is working on a cluster right now that will feature 1 million GPUs.
Those numbers will only grow larger over time, which will organically boost demand for Corning's fiber optic cables. Therefore, this stock could be a great buy at the current price for investors who are looking for a less conventional way to capture the AI boom.
