By Nate Wolf
The rise of artificial intelligence may be causing jitters in the software industry, but it has done no such thing for hardware stocks.
Companies crucial to the buildout of AI data centers have thrived in 2026, and that momentum continued Friday. What exactly those companies manufacture appears to be less important than whether they play a part in the AI supply chain.
Corning, the glass manufacturer, was the top performer in the S&P 500 on Friday, rising 7.2% to $139.31. The company makes fiber and cabling, which are key components in data centers. Optical-networking company Ciena was up 5.7% on the day. Comfort Systems USA, an HVAC and plumbing contractor that works with data centers, rose 5.8%.
What might seem like a big day for most stocks is nothing new for this trio. All three are up at least 45% so far in 2026. Whether or not AI turns out as useful or profitable as promised, the data centers that power the technology are in high demand.
Comfort Systems posted fourth-quarter revenue of $2.65 billion on Thursday evening. That was up 42% from last year and above analysts' expectations. Future growth was even more impressive: The company's order backlog jumped 96% from last year to $11.9 billion.
Backlog growth was strong across industries, but it was particularly notable among technology customers, said CEO Brian Lane on a conference call Friday. Data-center work is the dominant piece of that business segment.
Corning makes a very different set of products, but its story is similar. The company notched a $6 billion deal last month to supply Meta Platforms with cabling, optical fiber, and connectivity solutions for data centers. It is in conversations with other hyperscalers, as well, analysts at UBS noted in a research note Thursday.
"These contracts are giving GLW visibility to longer term demand growth, but also have the potential to bring in cash earlier to fund investments, " wrote UBS analyst Joshua Spector.
Taking into account recent boosts to capital spending guidance from hyperscalers, UBS raised its sales and earnings forecasts for Corning. The firm reiterated a Buy rating for the stock and boosted its price target to $160 from $125.
This kind of growth wasn't exactly unexpected. In December, Mehdi Hosseini of Susquehanna told Barron's that Corning was one of his top picks for the year due to the continuing optical networking buildout. Jim Kelleher, director of research at Argus Research, liked Ciena for similar reasons.
AI is expanding from hyperscalers to enterprises and even countries looking to build their own data centers, Kelleher argued. That requires the ability to deliver AI on secure networks through Ethernet or optical networking.
If the first two months of 2026 are any indication, the data-center boom also requires HVAC systems, fiber, and more. That is good news for the manufacturers able to provide them.
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 20, 2026 12:10 ET (17:10 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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