Your Stocks Are Up 200%. Now What?
Welcome to issue #32 of The Davem Dish. Every week I share what actually works in investing based on my 20 years of wins, losses and expensive lessons. You’ll also get my thoughts on solopreneurship and life in general because the same principles apply — keep it simple, stay consistent and focus on what matters.
I was in the Finger Lakes region of New York a few weeks ago on a family trip. If you’ve never been, the Finger Lakes are eleven long, narrow lakes gouged into the landscape by retreating glaciers about two million years ago. Seneca Lake, the largest of the group, is the deepest lake east of the Rockies, outside the Great Lakes themselves, with enough water to supply the entire United States for about two weeks. The Navy tests sonar equipment there because it’s one of the only inland bodies of water in the country deep enough to properly simulate ocean conditions. Some of the most beautiful lakeside country in the United States, all within a couple hours’ drive of each other. I grew up nearby.
We stayed on Keuka Lake, which I’d somehow never actually visited despite it being only about ninety minutes from my hometown. When I was a kid, I took the lakes and state parks nearby for granted. Visiting one was just something to do on a Saturday to pass the time, not something I truly appreciated. Returning as an adult, I see the area differently — well, at least in the summer.
Near the south end of Keuka Lake is a town called Corning. Same Corning as Corning glass, Corningware, and if you’re reading this on your iPhone, Gorilla Glass, the display cover the company has supplied to Apple since 2007. It’s the kind of town that used to be common in America and is now quite rare. A genuine company town, where one manufacturer employs a large share of the working population, has done so for over a century, and is still doing so today.
I was not totally surprised on how often the stock price came up in ordinary conversation. The restaurant server remarking it was above $200 the way you might mention the weather. The sommelier joking about it as he explains the intricacies of the region’s wines. Corning is a small town, and when the local company’s stock is on a tear, everyone knows.
Which made me think of the first stock tip I ever received.
The Stock Tip
Now you all know how I feel about stock tips, but bear with me.
When I was first getting interested in investing in my late teenage years, my grandfather told me I should look at a company called Corning. He’d in telecom his whole career, and I think he was excited about a couple of things — flat-screen televisions, the internet buildout, maybe both. Or maybe he just thought I would find the company interesting because it was near where I lived. I don’t remember a deep analysis. He was just offering the general kind of tip a family member offers.
I didn’t end up buying any shares. I didn’t have money to invest and I wouldn’t have known how to research it if I did. At that point, I didn’t yet know what I was looking for.
It’s probably good that I didn’t. If I had bought Corning in late 1999, when my grandfather was excited about it, I would have watched the stock go from around $24 to $113 by the fall of 2000, then all the way down to about $4 by the middle of 2002. A 96% decline in less than two years. It took until this year, roughly twenty-five years later, for the stock to surpass its 2000 peak. I would have learned a very expensive lesson early in my investing journey (perhaps not such a bad thing).
The Bust
How did Corning get caught up in the dot-com bust in the first place?
Corning was founded in 1851 and for most of its history it was a boring, patient, family-run industrial company that turned glass expertise into whatever the world needed. It made the glass envelope for Thomas Edison’s lightbulbs in 1879. It made the cathode ray tubes for the first generations of televisions. It made Pyrex coffee pots and Corningware bowls that your great aunt probably still has in her kitchen. In 1970, Corning researchers invented the first low-loss optical fiber — the technology that would eventually carry every phone call, every email, and every website across the globe. Even so, for another quarter century after that invention, fiber was one product among many, and Corning was still fundamentally the same patient industrial company it had always been.
The stock reflected that. It went from about $2.50 in 1984 to roughly $9 in early 1996. Slow, steady, unremarkable.
Then the internet happened.
Corning’s revenue nearly doubled from $3.8 billion in 1997 to $7 billion in 2000. Management decided to lean all the way in on fiber, betting that internet traffic would keep growing exponentially forever and every telecom company on earth would need Corning’s cable to move it. The Wall Street hype machine bid the stock from around $10 to $113 by late 2000. The company’s market value passed $115 billion. The founding Houghton family became the twelfth-richest family in America.
Then the telecom and dot-com bubble burst, and everything unwound in about eighteen months. Revenue sank from $7 billion to about $4 billion. The company wrote off nearly $5 billion of goodwill from acquisitions it had made in the peak year of 2000, producing a $5.5 billion loss for 2001. It laid off 12,000 workers, or 28% of its workforce, then another 4,000 the following year. It closed seven of ninety plants. It eliminated the dividend for the first time since 1881 — a 121-year streak of paying shareholders. James Houghton, the great-great-grandson of the founder, came out of retirement to take back the CEO chair and try to save the company.
The stock hit about $4 in 2002. It would not surpass its 2000 peak again until this year.
This Time Is Different
So how is Corning doing today?
The stock hit an all-time high of $271.78 in June, up over 200% from where it started the year. Meta signed a fiber deal worth up to $6 billion through 2030. Amazon signed a multiyear, multibillion-dollar contract. Nvidia signed a deal starting at $500 million that could scale to more than $3 billion. Google, Microsoft, and OpenAI are all customers. Optical communications revenue grew 35% in 2025 and now makes up 37% of the company’s total sales. Corning is expanding its Hickory, North Carolina plant into what it says will be the largest fiber-optic cable factory in the world.
Twenty-five years ago, Corning leaned all the way into the bet that internet traffic would keep exploding and everyone would need their fiber. The bet was correct in the long run but painful in the short run.
Wendell Weeks, Corning’s current CEO, was running the fiber optic business during the last cycle. He watched the boom and bust and now is the CEO steering the company through this cycle. And he is doing something different this time.
According to a Wall Street Journal piece from June, Weeks has structured the multibillion-dollar deals with Nvidia, Meta, and Amazon to include risk-sharing provisions. The customers are required to bear demand uncertainty. Corning is demanding upfront capital commitments before it expands capacity. Weeks told the Journal the company will not “bet the family farm” on AI spending cycles.
An analyst at Raymond James told the Journal that these terms are unusual. Large customers typically dictate vendor economics, not the other way around. Weeks countered that Corning’s decades of research and specialized fiber technology give the company the leverage to demand the upfront money.
The CEO of a company whose stock tripled in six months, in a market cycle that looks a lot like the last one he lived through, is quietly taking chips off the table, by restructuring the business so that if the AI spending cycle slows down, Corning does not have to eat the loss the way it did in 2001. He is negotiating profit protection into the contracts themselves.
Your job is to do the equivalent for your portfolio and the mechanics are much simpler than negotiating risk-sharing clauses.
How the AI Trade Got Here
The AI trade started in 2023, alongside the launch of ChatGPT with the “picks and shovels” companies. NVIDIA made the chips that made everything else possible, and the market rewarded that position with a climb from a couple hundred billion dollars in market cap to more than three trillion. What people miss about NVIDIA is that it never actually got expensive on the way up. Earnings grew even faster than the price, so the forward P/E ratio compressed. The stock today trades around 22 times forward earnings, which is cheaper than the Nasdaq 100.
What the market did next was extrapolate. As NVIDIA’s data center revenue became visible and hyperscaler capex numbers came into focus — Microsoft, Meta, Alphabet, and Amazon have guided to over $600 billion in combined AI infrastructure spending for 2026 alone — investors started asking who else benefits from those checks.
The trade migrated outward through every layer of the buildout. Power generators, distributors, and cooling. Then networking gear. Then the memory chip supercycle. Then fiber optics to connect the racks and campuses.
Not every stock in that memory chip and fiber optics chain is the same. Micron makes memory and is up 672% over the past year. It’s a decades-old cyclical business just now hitting its supercycle and trades at 21 times earnings. Sandisk is up 3,945% on the same memory demand, but only spun off from Western Digital a year ago and trades at 59 times earnings. Intel is up more than 349% on a turnaround story that is being underwritten by a direct US government equity stake and a $5 billion NVIDIA investment, while the company is still losing money. Corning at 87 times earnings is priced for AI capex to keep growing at the current rate for years.
Each hop outward from NVIDIA carries a different flavor of risk. Some of these names have earnings behind the rally. Some are still trading on a story and government support. But every one of them shares the same underlying exposure. If the AI capex cycle even pauses, these names will fall the hardest.
When you own a stock whose earnings already justify the current price, a pullback is just noise, and maybe even a buying opportunity. The business keeps compounding and eventually the price catches back up. When you own a stock whose earnings would have to grow dramatically from here just to make the current price look reasonable, the story has to keep expanding at exactly the rate the market has already assumed, or the price has to come down to meet reality. The peripheral names in this cycle are almost all in the second category and they will give back the fastest when the narrative shifts.
The Buy the Dip Reflex
What happens after a pullback, which is exactly where we are right now?
Sandisk is down 19% from its June peak. Micron down 22%. Corning down roughly 30%. The reflex for a lot of investors, especially anyone who missed the run on the way up, is to see the pullback and think this is finally the chance to buy in. Buy the dip. The stock is on sale. The story hasn’t changed.
That instinct is one of the most expensive habits in investing, and it’s especially dangerous in exactly this kind of setup. A stock that has tripled or quintupled in six months and then given back 25% is not on sale. It is still up dramatically for the year on a story that may or may not survive the next few quarters of earnings. What the pullback is actually telling you is that the marginal buyer has stopped showing up at the previous price. The people who wanted to own the stock at $200 have already bought it. The stock now has to find buyers at a lower price, and there is no rule that says the process stops at a 20% or 30% discount. The Corning shareholder who bought at $113 in 2000 saw the stock down 25% and probably thought the same thing. Then he watched it fall another 90% from there.
For the investor who already owns the position and is sitting on huge gains, the correct response to a sharp pullback in a stock that has run this hard isn’t buying more. It is checking whether you have a plan to protect what you have. It is asking whether you would still buy the stock today at the current price if you didn’t already own it. Most of the time, that question forces you to admit you would not.
The urge to chase and the urge to buy the dip are ways of participating in the momentum without thinking about the price. Both are ways of ending up as the person holding the bag when the narrative finally turns.
Taking Chips Off the Table
You do not have to guess the peak. You just have to have a plan.
The mechanics are simple. When a position has run up meaningfully — say, doubled or better from where you bought — you decide in advance what return you are willing to lock in and set an order that executes automatically. You can set a stop order at a fixed price that guarantees a minimum profit. Or you can set a trailing stop order that follows the stock up as it rises, moving your floor higher as the price climbs, and only executing if the stock reverses by a set percentage. When the reversal finally comes, the order sells you out somewhere near the top rather than after a full round trip.
Neither approach requires you to guess where the top will be or to predict whether the AI trade is a bubble and when it will burst. Both let you keep participating in the upside while removing the possibility of a ride back to zero. If the stock keeps rising, great. Your trailing stop moves up with it and you keep making money. If the stock reverses, you are out with a big profit instead of holding a bag for the next twenty-five years.
This is the unglamorous discipline in investing. You are not giving up on your investment. You are just making sure you do not watch your gains evaporate.
The Woman at the Ice Cream Stand
After visiting the Corning Museum of Glass one afternoon, we stopped at an ice cream place downtown. There was an older woman ahead of us in line. Plain clothes, tired posture, looked a little down on her luck. She ordered a small cone, paid in exact change, and walked out to the parking lot.
I watched her get into a brand-new BMW 7 series and drive away.
I obviously don’t know that woman, but I couldn’t help but think that she might have been a retired Corning employee or the widow of one. Someone who watched the stock go to $113 and back to $4, felt what a 96% drawdown does to a household in a town where the company is the town, and quietly decided that this time, with the stock back at multiples of anything she ever expected to see again, she was going to take some chips off the table before the cycle turned.
Wendell Weeks says he isn’t going to bet the family farm on AI. The woman with the ice cream cone, whatever her story actually was, looked like someone who wasn’t either. Neither should you.
Let the winners keep running if they will, and take some chips off the table if they don’t. It isn’t exciting. Nobody will write a book about it. You’re just quietly protecting the compounding that actually builds wealth over the decades.
Cheers,
Andrew
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The content provided are personal opinions and presented for educational purposes only, as of the date published or indicated. Davem Advisors LLC is not a bank, licensed securities dealer, broker or investment advisor. Displayed returns are unaudited. Nothing stated constitutes a recommendation or advice as to whether any investment is suitable for a particular investor. You alone are solely responsible for determining whether any investment, strategy or service is appropriate for your objectives. Past performance is no guarantee of future results. Inherent in any investment is the risk of loss.