Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 0
WSJ on Corning's Cinderella moment:
Corning’s cables have become the connectors of choice. The Cinderella story for a relatively unflashy but high-tech component has been a boon to the 175-year-old company, and a lesson in how being willing to lose money on new ideas for a long time can pay off.
Corning stock is hovering around its all-time high, boosted by a recently announced $6 billion deal with Meta to supply fiber-optic cable for the company’s rapidly growing array of AI data centers. Corning said it is in talks with others for more such deals.Interesting overview of a pick-and-shovel manufacturer to the current gold rush.
Anyone here know the company well?
Why a 175-Year-Old Glassmaker Is Suddenly an AI Superstar
Gift link:
https://www.wsj.com/tech/corning-fiber-optics-ai-e...
--sutton
No. of Recommendations: 0
Anyone here know the company well?
Second verse, same as the first. I held GLW during the late 90s "information superhighway" hype. I pulled up a long term chart for GLW. It shows a spike to $113.33 in September of 2000, then hitting a low of $1.50 in August 2002, when the air had leaked out of the "information superhighway" hype. The chart also shows a low of $25.26 in October 2023, and a close Friday of $122.16. Pass the Dramamine. It has been so long, I don't remember how I did on that trade.
When I received my proxy, they enclosed a coupon for 10% off of Steuben Glass products. I never made it to a shareholder's meeting. Even if I had, I don't have an artistic bone in my body, so would not have bothered with the Steuben products.
My uncle reported that Corning's "Museum Of Glass" is a fascinating place to visit.
Steve
No. of Recommendations: 1
Don't have time to read the link till later, so maybe they discussed this:
the fiber connectors, in my experience, do not wear out. So I can
totally see a surge in sales of connectors, but I don't think it
leads to recurring annual sales,longterm. My 2nd last stint before retirement was turning up fiber optic equipment for a large telecom company. And it used a lot of fiber optic jumper "cables". But it was pretty rare for one of these jumpers to go bad and need replacement.
As new equipment is added to the data centers, all of it will need fiber connectors, no question about it. But as the old saying goes, trees do not grow to the sky. And data centers equipment installs will eventually reach saturation. And maybe that takes a few years, but the installs will slow. Corning stock at ath levels, so they will need explosive growth to keep accelerating that market cap.
Anybody's guess as to how long that lasts.
No. of Recommendations: 4
As new equipment is added to the data centers, all of it will need fiber connectors, no question about it.
More unknowns
-repeat of chip orders in 2000: users entering redundant orders with multiple vendors in the hope that one of them will deliver on time. The moment the supply caught up with demand, the redundant orders were cancelled, and forward revenue estimates collapsed.
-repeat of fibre orders in 2000: everyone way overbuilt their fibre networks, with loads of fibre that remained dark for years, so there was no follow on business for fibre makers.
-how many of the data centers will actually be completed? We have seen this "new hotness" hype before, most recently in EV battery plants. Will vendors be paid when a project is cancelled before it is complete?
-how many of the data centers will go BK, because the industry is overbuilt and margins are near zero, meaning vendors don't get paid?
Steve...remembers the day after Thanksgiving, 2000, when Broadcom warned
No. of Recommendations: 2
Speaking of data centers, the local noon news just reported on pushback another proposed center is receiving. All together, there are nine data centers proposed in the metro Detroit area. Nine?
Steve
