Nvidia's new deal with Corning validates one of the hottest AI trends out there

By Hannah Pedone

Optical components are increasingly in short supply, and Nvidia is partnering with key players to gain an edge

Corning's stock rose over 23% on Wednesday morning.

Optical fiber networks are the next big thing in the AI boom, and Nvidia's newly inked deal with Corning helps cement that.

Shares of Corning (GLW) were up over 23% on Wednesday morning after Nvidia (NVDA) and the glassmaker agreed to partner on a multiyear optical fiber deal. Corning plans to open three advanced manufacturing plants for developing optical technology alongside Nvidia.

The deal will give Nvidia rights to invest up to $2.7 billion in the company, and the chipmaker will acquire warrants to buy up to 15 million shares of Corning's common stock.

The companies wrote in a joint press release that the project will increase Corning's optical manufacturing capacity by 10-fold.

See also: It's been one of Wall Street's most heated AI debates - and it may be totally missing the point

Seaport analyst Jay Goldberg told MarketWatch that for months Nvidia has been working on investing and partnering with companies to secure parts in the AI supply chain in shortage.

"If you look at the amount of fiber optics strands that some of these data centers will need, it makes sense that they work with Corning," he said.

Goldberg added that there will be a massive increase in optical usage in data centers in a year or two and Nvidia is getting ahead of that trend.

Nvidia previously struck deals with Lumentum Holdings (LITE) and Coherent (COHR), two other optical players.

Read more: Optics is the next big AI bottleneck. This company could be an underrated beneficiary.

-Hannah Pedone

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05-06-26 1026ET