- Corning's Q3 earnings were good, with sales and EPS increasing and strong Q4 guidance
- But its stock is trading significantly lower since June
- Corning's CEO was asked today about the durability of AI-related demand
Corning had another good quarter, according to its Q3 2026 earnings report today. But the company’s stock remains low at about $126 per share, compared to its high of about $221 per share in June. Apparently, investors are worried that all Corning’s business from AI might not materialize if there’s an AI bust. Or worse, if AI creates a catastrophic disaster.
Today, Corning reported that year over year it grew sales 19% to $5.1 billion and grew earnings per share (EPS) significantly faster at 36% to $0.91, both exceeding guidance.
And it expects strong performance to continue. For the fourth quarter, it expects to grow sales about 19% year over year to a range of $5.2 billion to $5.3 billion and to grow EPS by about 36% year over year to a range of $0.96 to $1.
The company is in the midst of its “Springboard” plan to grow its annualized sales run rate to $20 billion by the end of 2026, $30 billion by the end of 2028 and $40 billion by the end of 2030.
Corning’s CEO Wendell Weeks said today, “In the third quarter, we already began to grow 19% year over year to $5.1 billion. That is an annualized run rate of $20.3 billion. And looking ahead to quarter 4, if you take the midpoint of our guidance, we'll grow 19% again to $5.25 billion. That is an annualized run rate of $21 billion.”
Corning CFO Ed Schlesinger said, “We delivered strong free cash flow of $661 million even as we continue to invest to capture robust demand.”
The company’s Q3 results were led by its Optical Communications division with sales of $2.4 billion, up 44% year over year. And its Enterprise business also did well, growing sales 84% year over year, driven largely by networking-scale out, which connects GPU racks to each other.
In its Carrier business, sales grew 4% year over year, driven by growth in data center interconnect. During Q3, Corning announced long-term customer agreements with Zayo, Verizon and AT&T to deliver fiber and connectivity solutions in support of their network expansions across broadband and data center interconnect.
So, on the face of it, Corning is doing great. It’s winning huge supply deals and exceeding its own financial targets.
The canary concern
One analyst on today’s earnings call said there’s a lot of concern in the marketplace about the durability of AI-related demand. And Anthropic’s IPO filing, which lists 90 pages of risk factors, such as AI going rogue, doesn’t help to quell investor concerns. Neither did news a couple of weeks ago that a former Anthropic AI researcher said AI could destroy humanity.
But Weeks declined to address all the fears about AI. He simply focused on the business markers that currently exist. He said there are tremendous growth opportunities from AI, driven by the huge demand for compute and networking needed for AI inferencing.
But Corning is not only benefiting from the high demand, it’s also expanding manufacturing capacity to serve that demand. In May Corning announced it was building three new manufacturing plants in the U.S.
Investors have to weigh future profits against the costs, with the overhang of concerns that AI may be a bubble. Data-center spending could slow, customers could postpone projects or today's exceptional growth could normalize.
In fact, Gartner Senior Director Analyst Will Sommer has warned that current capital spending on data centers is “unsustainable.”
And other analysts, including Berstein’s Mark Moerdler, have questioned hyperscalers about the disconnect between spending and revenue on recent earnings calls.
So perhaps Corning’s sluggish stock price in contrast to its excellent earnings is just an early warning sign — like a canary in a coal mine — that investors are concerned about an end to the AI boom.
Read more stories about Corning and AI on Fierce Network:
Corning expects an annualized revenue run rate of $20B for 2026
Corning to build 3 new optical plants in the U.S. with a little ($500M) help from Nvidia
Gartner warns AI data center capex is ‘unsustainable’ as $3.5T write-down risk looms