Corning Inc. [GLW]: What is the background behind the surge in stock prices related to optical fibers? | Jun Ishihara's 5 U.S. Stock Trends | Moneyクリ MoneyX Securities' investment information and media useful for money.

Data Center Gold Rush: Tech Giants Expand Investments

An article titled "This is the state of play in the global data center gold rush" has been published on the World Economic Forum (WEF) website (dated April 24). It points out that data centers are not just digital infrastructure, but also high-value investment assets, serving as the backbone of the internet and the digital economy.

The digital economy is experiencing explosive growth, leading to an unprecedented increase in data centers. According to a column, the current market size of the global data center industry is estimated to be around $242.7 billion, and it is projected to double to over $584 billion by 2032. Major tech companies such as Amazon.com [AMZN], Google (Alphabet) [GOOGL], Microsoft [MSFT], and Meta Platforms [META] are leading the way in expanding their investments.

These facilities are estimated to handle over 95% of the world's internet traffic (the information transmitted over the internet), providing real-time connectivity to billions of users. Moreover, data centers are not only crucial for economic competitiveness but have also become an essential infrastructure for national economic security, with governments around the world increasingly prioritizing data sovereignty and management.

[Figure 1] Over 40% of the world's data centers are concentrated in the United States. Source: Created by the author based on data from the IEA (International Energy Agency)

[Figure 2] Transition of Data Center Capacity and Year-on-Year Change Rate Source: Created by the author based on data from the IEA (International Energy Agency) The "submarine cables" that are spread across the seabed around the world support this communication. According to an article published on July 30 in the METI Journal, a web magazine of the Ministry of Economy, Trade and Industry, titled "Policy Feature: Strong Economy's Guardian - Economic Security vol.5 'Data Artery' Submarine Cables Aiming to Expand Global Share with 'Trust' Towards Japan," there are about 500 submarine cables spanning a total length of approximately 1.5 million kilometers on the seabed worldwide, with 90% of the global share divided among three major companies from France, the United States, and Japan.

The market for optical fibers used in submarine cables has entered a growth phase.

The "submarine cables" laid on the ocean floor to transmit communication data such as the internet use optical fibers. In the past, satellite communication was mainstream, but due to its superiority in data volume and speed, submarine cable communication now accounts for about 99% of international communication. On the other hand, against the backdrop of the rapid increase in international data communication volume and the frequent accidents involving submarine cable cuts, there is a global shortage of submarine cable laying ships.

Among them, the company that is gaining attention is the American firm Corning [GLW]. Corning was founded in 1851 and is engaged in the production of glass panels for liquid crystal displays and optical fibers. Currently, it holds the top global market share in optical fibers and glass substrates for liquid crystal and organic EL. The stock price has reached the 63-dollar range, the highest in 52 weeks, and its recent market capitalization has exceeded 50 billion dollars. The stock price has risen about 60% over the past year, showing strong performance.

Corning announced on July 29 that its performance for the second quarter of 2025 exceeded market expectations in both revenue and profit. The demand for optical fibers used in high-speed data communication is expanding, and the company indicated that strong performance is expected to continue into the second half of 2025.

[Figure 3] Corning's Sales Revenue and Net Income Trends Source: Created by the author based on financial statements According to the financial statement materials, Corning has 34 production sites in 15 states across the United States. It is said that about 90% of the products sold in the U.S. are manufactured domestically. This is noteworthy as it suggests that they are likely to be less affected by Trump's tariffs.

Wendel Weeks, CEO of Corning, indicated that leveraging advanced manufacturing facilities in the United States will become an additional growth factor in the coming months, and stated that "overall, our company is positioned to achieve sustainable growth even after 2026."

In May, it was announced that they would partner with Broadcom [AVGO] to provide Ethernet switches that accelerate the processing power of AI data centers (a device that efficiently relays data communication when connecting multiple computers and network devices to build an Ethernet network). This collaboration is expected to enable a previously unattainable concentration of speed and bandwidth while keeping power consumption and costs down with optical connection solutions.

With the transition to AI-centered data center infrastructure, the optical cable and optical fiber market has entered a growth phase. Steady expansion is expected in the future, and not only Corning, but also in the Japanese stock market, companies related to electric wires such as Fujikura (5803), Sumitomo Electric Industries (5802), and Furukawa Electric (5801) are performing well.

5 Stocks to Watch by Jun Ishihara

Corning [GLW] Source: TradeStation

Meta Platforms [META] Source: TradeStation

Amazon.com [AMZN] Source: TradeStation

Alphabet [GOOGL] Source: TradeStation

Microsoft [MSFT] Source: TradeStation