Ritholtz Wealth Management's Josh Brown is already up nearly 20% on his Corning Incorporated (NYSE:GLW) investment from last month. Although he’s sitting on significant gains over a very short period of time, he’s not selling as he continues to believe the stock is a misunderstood AI beneficiary.
What To Know: Corning shares are rallying Monday after the company raised its second-quarter guidance on strong AI-related demand.
Management now expects core sales in the second quarter of approximately $3.6 billion, up from previous guidance of $3.4 billion. Analysts currently expect core sales of $3.41 billion, according to Benzinga Pro.
Corning also said it now expects core earnings per share to come in at the high end of or slightly above management’s guided range of 42 cents to 46 cents per share. Current analyst forecasts call for earnings per share of 45 cents.
Corning shares were up nearly 12% at last check. The sharp move higher comes just weeks after Brown identified Corning as an under-the-radar AI play that was just “waiting to be discovered.”
“They’re raising guidance for exactly the reason I thought they would,” Brown said Monday on CNBC’s “Fast Money Halftime Report.”
“You cannot build data centers worth trillions of dollars and not order more optical components and not order more glass and that’s what this company does, plain and simple.”
Corning is a materials company that focuses on glass science, ceramic science and optical physics. The company’s recent strength is being attributed to strong adoption of its new optical connectivity products for generative AI.
Brown noted last month that glass is needed to produce optical fiber cables and is often used in the AI chips themselves as he announced he took a position in Corning. He also argued that Corning was in the midst of a technical breakout to the upside. It appears he was correct on both fronts, at least in the short term.
Despite the quick gains, Brown isn’t trimming his position. He told CNBC that he expects analysts to raise estimates on the stock this week as it begins to be considered an AI-related play. He also expects the stock to get more attention in general as funds start including Corning in AI strategies.
“I’m not taking a profit here because I still think this could be a $50 stock by year-end. Today is the day that Corning became an AI stock,” Brown said.
Corning will report earnings for the second quarter and provide more details on its updated outlook on July 30.
GLW Price Action: Corning shares closed 12.02% higher at $43.05 on Monday, according to Benzinga Pro.
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