Corning stock price has gone bonkers in the past few years and is now trading at its highest point on record. GLW jumped to a record high of $165, which is about 590% above the lowest level in 2023. This surge has pushed its market capitalization to over $141 billion.
Corning stock becomes expensive amid the AO boom
Corning is a top company whose products are used by billions of people globally. For example, it makes the Gorilla Glass that is available in most smartphones, tablets, and laptops.
The company also makes optical communication products that are used in data centers and in the telecommunications industry. It also makes display glasses and products in the life sciences industry.
Corning stock price has soared in the past few years amid the data center boom that has led to a surge in demand for its solutions. For example, it announced a $6 billion deal with Meta Platforms earlier this year for its data centers.
At the same time, the company launched an upgrade to Springboard, its strategic plan. It now expects to add an additional $11 billion to its revenue by the end of 2028. It also aims to boost its operational margin to 20% and above, grow its market share, and return cash to investors.
The most recent results showed that Corning’s revenue rose by 14% to $4.42 billion, while its core operating margin rose to 20.2%. Its annual revenue rose to $16.42 billion, higher than what analysts were expecting.
Still, there are two main risks that Corning stock faces. The first one is that the company has become highly overvalued considering that the estimate among analysts is that its annual revenue growth will be about 14% this year and 14% next year.
It has a forward PE ratio of 47, which is much higher than most companies, including the likes of NVIDIA and Microsoft. NVIDIA, whose growth is expected to be over 76% this year, has a forward PE ratio of 21. Its multiple is also much higher than that of the S&P 500 Index, which is at 19, despite its earnings growth being over 13%.
GLW stock is in the accumulation phase of the Wyckoff Theory
The other risk is from a technical perspective. The weekly chart shows that the stock remained inside a narrow range for years.
It remained between the key support level at $15 and $42 between 201 and April 2025. This is a sign that it was in the accumulation phase during this time.
The stock has now moved to the markup stage of the Wyckoff Theory. This phase is characterized by the Fear of Missing Out (FOMO) and a parabolic move.
This means that the stock will soon move into the distribution phase of this theory and retreat sharply. If this happens, the stock may drop to the key support level at $100.
This retreat will happen as the investors start taking profits and as panic selling ensues. It will then happen as it goes through a valuation reset to address the first point above.
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