Bank of America / Citigroup: Corning’s stock price plunges nearly 20%, both banks still maintain a buy rating

Deep Tide TechFlow message, according to Tide direction research: on July 28, Corning’s share price fell 19% in a single day. In Q2, Corning’s revenue beat expectations; its enterprise optical communications business grew by 65%. In the Q3 revenue guidance, the midpoint is $4.95 billion, slightly below market expectations. The market interpreted this guidance as a signal that the pace of AI infrastructure investment may be slowing. The year-over-year growth rate of the optical communications business fell from 81%, continuously for three quarters, to 32%.

In a July 28 research report, BofA Securities cut its target price from $243 to $200 and maintained a Buy rating. On the same day, Citi Research reduced its target price from $240 to $220 and maintained a Buy rating. Both firms judged that the stock’s decline was due to valuation adjustments, rather than a deterioration in fundamentals. The firms said Corning’s long-term structural demand drivers from AI infrastructure have not changed, optical communications technology still has high barriers, and long-term supply agreements are becoming a business ballast. The implied upside potential to the current share price implied by the two target prices is 67% and 83%, respectively.