Corning Inc. shares tumbled more than 8% on Wednesday, leading a broad selloff in US optical communications stocks. The decline extended a pullback from the company's June 30 record high of $271.78, with the stock now down over 36% from that peak. The move followed more than $54 million in insider stock sales near the highs and a bearish options trade ahead of second-quarter earnings due July 28.
Corning Inc. fell more than 8% on Wednesday, extending its decline from a record high as a broad selloff swept through US optical communications stocks.
"Corning is testing a historically bullish trendline at its 80-day moving average, a setup that has preceded higher prices one month later 72% of the time over the past decade," said Rocky White, senior quantitative analyst at Schaeffer's Investment Research.
The stock closed at $174.41, down 7.1%, after touching an intraday low near $171. Marvell Technology dropped more than 6%, while Lumentum, Coherent and Credo each fell over 5%. The selloff occurred even as the broader market advanced, with the S&P 500 rising 0.38% to 7,572.40 and the Nasdaq Composite gaining 0.62% to 26,269.23. An institutional trader purchased weekly put contracts on Tuesday, betting on further downside ahead of the company's second-quarter earnings report scheduled for July 28.
The pullback has erased more than $35 billion in market value since the stock peaked on June 30, when its trailing price-to-earnings multiple had surged past 90 times — well above its five-year historical median. Chief Executive Wendell Weeks sold 100,000 shares at an average price of $186.46 in June, generating $18.6 million, while Senior Vice President Soumya Seetharam sold 20,000 shares at about $206 in May. Combined insider sales exceeded $54 million with no corresponding insider purchases, according to filings. Wall Street remains broadly bullish, with 10 analysts rating the stock a buy and six neutral, and a consensus price target of $194.69 implying about 12% upside from current levels.
The optical communications sector's decline comes as investors reassess valuations following an AI-driven rally that lifted Corning and its peers to record levels. Corning, a key supplier of fiber optic and optical connectivity solutions for data centers, had benefited from enthusiasm around artificial intelligence infrastructure spending. However, the stock's trailing P/E multiple above 90 times created vulnerability to any negative signals.
Short interest in Corning fell 13.7% during the most recent reporting period, representing 2.6% of the float, or less than two days' worth of trading volume. Wall Street expects Corning to report core earnings per share of $0.75 to $0.76 on revenue of about $4.60 billion for the second quarter. The company beat first-quarter estimates in April, delivering EPS of $0.70 on revenue of $4.34 billion, up 18.1% year over year.
This article is for informational purposes only and does not constitute investment advice.
