11:46 AM EDT, 07/09/2024 (MT Newswires) -- Corning's (GLW) "outperformance" is driven by the increasing demand for optical connectivity products, fueled by the continuous growth of generative artificial intelligence, Morgan Stanley said in a Tuesday note.

On Monday, the company announced a higher Q2 core sales guidance of $3.6 billion from $3.4 billion and said it expects the quarter's core earnings per share to be at the high end of or "slightly above" its estimate of $0.42 to $0.46.

The investment firm said demand from GenAI is "materializing slightly ahead of expectations" and Corning's optical business is also set to benefit from AI-related data center build-outs. Morgan Stanley raised its estimates for Corning's Q2 and 2024 core revenue and EPS.

Morgan Stanley also raised its price target for Corning's stock to $39 from $38, while maintaining its equal-weight rating.

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