Corning rallies after Amazon taps fiber-optics maker for AI data center expansion

Shares of Corning GLW climbed sharply by 8% on Monday after Amazon unveiled a multibillion-dollar agreement with the advanced glass and fiber-optics manufacturer.

The deal will see Corning supply critical networking infrastructure for the technology giant's expanding US data center footprint.

The long-term partnership will see Corning provide optical fiber, cable, and connectivity solutions that support Amazon's expanding cloud and artificial intelligence infrastructure.

The companies said the investment will also create 1,000 jobs at Corning's manufacturing facilities in North Carolina.

The announcement comes as demand for AI computing power continues to drive large-scale investments in data centers, increasing the importance of high-speed networking equipment that links servers, storage systems, and AI chips.

"Amazon's data centers power the services millions of people and businesses rely on every day," the companies said in a joint statement.

"Corning's fiber optics are a critical piece of that infrastructure, and together, these investments help fuel the US economic engine."

AI boom boosts demand for fiber connectivity

Corning's optical communications business has emerged as a major beneficiary of the AI boom.

As hyperscale cloud providers and AI companies build larger and more complex data centers, demand has risen for fiber-optic solutions capable of transmitting vast amounts of data at high speeds.

Fiber-optic cables have become a foundational component of AI infrastructure because they connect data centers and enable communication between the racks and processors handling intensive AI workloads.

The Amazon deal provides another boost to Corning, which has increasingly positioned itself as a key supplier to the AI ecosystem.

The company's shares have more than doubled this year and have risen nearly sixfold since the end of 2023 as investors bet on sustained spending across the AI supply chain.

The stock was also among the companies hit during Friday's broad selloff in semiconductor and AI-related names.

Corning shares had fallen more than 10% amid concerns that higher interest rates could slow the debt-funded expansion of data center projects.

Investment wave continues

The latest agreement adds to a string of AI-related commitments benefiting Corning.

In May, Nvidia committed to invest up to $3.2 billion in Corning through a partnership that includes the construction of three advanced manufacturing facilities dedicated to supporting the chipmaker's operations.

Earlier this year, Meta pledged up to $6 billion as the anchor customer for an expansion of Corning's optical cable plant in Hickory, North Carolina.

That project is expected to generate approximately 1,000 jobs.

Amazon Web Services CEO Matt Garman said the company's investments in North Carolina have already created more than 26,000 jobs.

Amazon separately committed $10 billion last year toward new data center developments in the state.

The new agreement will also expand Corning's training program for fiber-optic technicians in North Carolina, helping develop a workforce needed to support growing infrastructure demand.

Manufacturing gains strategic importance

While Corning is widely recognized for producing display glass used in Apple's iPhones, optical communications remains its largest and fastest-growing business segment.

The company, which invented optical fiber for long-distance communications in 1970, now supplies millions of miles of fiber-optic cable used by major cloud providers and AI companies worldwide.

The partnership also aligns with efforts by the Trump administration to strengthen domestic AI-related manufacturing and reduce dependence on overseas supply chains.

"This agreement with Amazon represents a significant milestone for Corning and for American manufacturing," Chief Executive Wendell Weeks said.

He added that the partnership will help "lead the way toward building a resilient US manufacturing base."

Weeks previously said that hyperscale cloud companies are on track to become Corning's largest customer group as AI infrastructure spending accelerates.