Deals with 2 unnamed hyperscalers ‘larger’ than $6B Meta pact
Corning’s investment story looks even sweeter after Jim Cramer’s meeting with CEO Wendell Weeks on “Mad Money” Thursday night. A day after Corning’s blockbuster optical partnership with Nvidia, Weeks shed some more light on the company’s new supply deals with two unnamed hyperscalers. Corning first announced these along with its earnings last week, but details were light. Here’s Weeks’ comment, which caught our attention in Jim’s interview: “It’s probably the biggest commercial deal in my career that we just entered into with Nvidia, and also the other two big deals are bigger than the Meta deal that was made public, and I’m sure some of those customers will want to be more open about that over time.” We knew these were about the same size as the Meta deal, which Corning went public in January and said was worth $6 billion to supply fiber optic cable for data centers by 2030. But it is certainly encouraging to hear that they are actually larger. At least that gives us a base of about $12 billion for combined deals. On Corning’s April 28 earnings call, Weeks said of the two new deals: “When we last spoke [in January]I shared that we are in the process of signing other agreements of the same size and duration as the commodity agreement. We have now signed two more large, long-term deals with hyperscale customers. And each is similar in size and duration. Now I know we will get questions about who the other clients are and the details of our deals. However, our philosophy is to let our customers decide when and where to make announcements about critical supply chain decisions. I would say these deals are very important, and they share the risks and rewards of necessary expansions with our strategic customers.” Now back to Thursday’s announcements. These two hyperscale deals, valued at about $6 billion each, now look more like they’re worth at least $6 billion. Corning may be celebrating its 175th anniversary this week, but a young startup in a new field has growth prospects that are at the heart of it all. And when you combine that perspective with the experience gained from nearly two centuries of operations, you’ve got something worth owning. Corning’s execution may not have been perfect over these many years, but the lessons learned are evident in these latest deals. But that’s precisely why we’re seeing deals like this, where customers are sharing not only the rewards of capacity expansion but also the risks that come with it, and are more than happy to endure some dilution as Corning shareholders in exchange for a deeper relationship with solar at the center of the AI solar system. He interviewed Nvidia CEO Jensen Huang about the alliance, which Jensen said will “reinvigorate American manufacturing” with glass wires that will one day carry data around the world There aren’t many, but there is at least one — and we plan to hold on to that stock, in addition to the more than 100% rise in shares this year (Jim Cramer’s Charitable Trust has long held GLW, NVDA, and META. See here at the Investment Club with Jim Cramer). You will receive a trade alert before executing a trade Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable foundation’s portfolio Jim waits 72 hours before executing the trade after discussing a stock on CNBC TV. THERE IS NO CONTRACTOR OBLIGATION OR DUTY AND NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
