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What happened: Corning (GLW) stock jumped 9% on Wednesday, reaching an intraday record high.
What’s behind the move: The glass manufacturer and fiber optic hardware company struck a $500 million deal with Nvidia (NVDA) to supply components for the artificial intelligence leader’s data center build-out.
According to a regulatory filing, Nvidia will purchase 3 million shares of Corning at $0.0001 each and will have warrants to buy up to 15 million shares for $180 each.
Corning said it would build three new factories in the US to expand manufacturing capacity for optical connectivity products tenfold and increase fiber production capacity by 50% in order to meet the accelerating demand from AI data centers.
What else you need to know: Nvidia has been aggressively inking supply chain agreements with fiber optic and optical communications companies as it tries to keep up with data center demand.
While inexpensive copper remains the dominant form of connectivity in data centers, it’s limited by distance, which is where fiber optics comes in. Nvidia CEO Jensen Huang has emphasized the need for more copper and optic capacity to meet the demand for AI.
That’s helped boost Corning, which has seen its stock rise over 100% since the beginning of the year. In January, Corning also struck a $6 billion, multiyear deal with Meta (META) to help with its data center build-out.
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