What happened: Corning (GLW) shares rose 9% on Wednesday, hitting an intraday record.
What’s behind the measure: The glass manufacturer and fiber optic hardware company reached a $500 million deal with Nvidia (NVDA) to supply components for the construction of the artificial intelligence leader’s data center.
According to a regulatory filing, Nvidia will buy 3 million Corning shares 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% to meet growing demand from AI data centers.
What else do you need to know? Nvidia has been aggressively signing supply chain deals with optical and fiber 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 is limited by distance, which is where fiber optics come into play. Nvidia CEO Jensen Huang has emphasized the need for more copper and optical capacity to meet AI demand.
That helped boost Corning, whose shares have risen more than 100% since the beginning of the year. In January, Corning also reached a multi-year deal worth $6 billion with Meta (META) to help with the construction of its data center.
Click here for the latest stock market news and in-depth analysis, including the events moving stocks.
Read the latest financial and business news from Yahoo Finance