Corning trim signals portfolio discipline as AI infrastructure demand strengthens

The London Company has disclosed a reduction in its position in Corning Incorporated (NYSE: GLW) following a strong second quarter for the US technology firm. In its second-quarter 2026 investor letter for the Income Equity Strategy, the investment management firm identified Corning as a notable contributor to portfolio performance, attributing the outperformance to improving demand across optical communications and artificial intelligence infrastructure.

The firm noted that Corning continues to benefit from growing fibre deployments and increasing optical content within data centres. These factors supported stronger earnings and margin expectations, driving the stock’s significant appreciation. Corning shares closed at $173.21 per share on 17 August 2026, reflecting a 168.46 per cent gain over the past 52 weeks and a 6.65 per cent rise over the past month. The company’s market capitalisation is reported at $149.20 billion.

Despite the strong performance, The London Company trimmed its holding to manage position size and reduce concentration in AI data centre infrastructure. The firm clarified that this move was a matter of portfolio discipline rather than a change in its fundamental view of the company. It maintained confidence in Corning’s technology leadership, pricing power, and diversified end markets, which it believes position the company for durable long-term growth.

The trim occurred against a backdrop of a broader US equity rebound in the second quarter. The Russell 3000 index rose 15.4 per cent, while the S&P 500 achieved its best quarter since 2020, driven by AI infrastructure spending and strong earnings. Technology emerged as a market leader following a semiconductor rebound, while energy and defensive sectors lagged. The momentum intensified in late June following a US-Iran peace deal that lowered oil prices.

The London Company’s Income Equity Strategy returned 12.3 per cent during the quarter, compared to a 13.9 per cent increase in the Russell 1000 Value Index. The firm noted that stock selection was a drag on relative performance, partially offset by positive sector positioning. Looking ahead, the firm anticipates modest equity returns given elevated valuations and low dividend yields, suggesting a focus on quality and active management as a prudent investment strategy.

Hedge fund interest in Corning has also increased, with 91 portfolios holding the stock at the end of the first quarter of 2026, up from 85 in the previous quarter. While The London Company remains confident in Corning’s long-term prospects, it emphasised the importance of managing concentration risk in a sector experiencing rapid growth and high valuations.