Deals with 2 unnamed hyperscalers ‘larger’ than $6B Meta pact
The investment story for Corning looks even sweeter in the wake of Jim Cramer’s sit-down with CEO Wendell Weeks on “Mad Money” on Thursday night. One day after Corning’s blockbuster optical partnership with Nvidia , Weeks shed some more light on the company’s new supply agreements with two unnamed hyperscalers. Corning first disclosed these along with earnings last week, but details were light. Here’s the comment from Weeks that caught our attention from Jim’s interview: “Probably the biggest commercial arrangement ever in my career we just entered into with Nvidia, and then these other two major ones are larger than the Meta deal that’s been public on, and I’m sure some of those customers will want to be more open about that over time.” We knew they were about the same size as the Meta deal, which Corning went public with back in January, saying at the time it was worth up to $6 billion through 2030 to supply fiber optic cables for data centers. But to hear they are actually larger is, of course, encouraging. At the very least, it gives us a floor for these combined deals at about $12 billion. On Corning’s April 28 earnings call, this is what Weeks had to say about the two new deals: “On our last call [in January], I shared that we were in the process of concluding other agreements of the same size and duration as the Meta agreement. We now have concluded two more large, long-term agreements with hyperscale customers. And they are each similar in size and duration. Now I know, we will get questions on who the other customers are and the specifics of our arrangements. However, our philosophy is to let our customers decide when, and where they choose to make announcements on their critical supply chain decisions. I can share that these deals are very significant, and they share the risk and rewards of the required expansions with our strategic customers.” Now back to Thursday’s remarks. Those two hyperscale deals we figured were worth about $6 billion each, now it seems they’re more like at least $6 billion. Corning may be celebrating its 175th anniversary this week, but it’s got the growth prospects of a young startup in a new field, which just so happens to be at the center of, well, everything. And, when you combine that outlook with the experience that comes from nearly two centuries of operation, you get something worth owning. Corning’s execution may not have been perfect over those many, many decades, but the lessons learned are clearly on display with these recent deals. The company has been burned before, by capacity expansion investments made ahead of revenue that never materialized. However, that is exactly why we are now seeing deals like these, which have customers share not only in the rewards of capacity expansion but also in the risks that come with it. That’s why we are so thrilled about these hyperscale deals and why we are more than happy to suffer a bit of dilution as Corning shareholders, in exchange for a deeper relationship with the sun at the center of the AI solar system, Nvidia. Jim also interviewed Nvidia CEO Jensen Huang on Thursday evening about his company’s Corning alliance. Jensen said it will “revitalize American manufacturing.” After all, there aren’t many companies around like Corning that can say they went from ushering in the age of electricity with glass for light bulbs to ushering in the AI revolution with glass wires that will one day transport the world’s data at the speed of light. There aren’t many, but there is at least one — and we plan to hold onto it for the run that’s about to take place on top of this year’s already more than 100% surge in shares. (Jim Cramer’s Charitable Trust is long GLW, NVDA, and META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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