Corning (NYSE: GLW) stock jumped 5.2% through 1:05 p.m. ET Wednesday afternoon after Deutsche Bank analyst Matt Niknam raised his price target on the glassmaker to $49 per share and reiterated his buy recommendation.

Looking out over the next three years, Niknam suggests there's a good chance Corning will enjoy 15%-per-year earnings growth as its products come in greater demand to facilitate growth in the artificial intelligence (AI) economy.

What Deutsche Bank says about Corning

Yes, you read that right. Deutsche Bank just called Corning an AI stock. But why?

In today's note, covered on StreetInsider.com, Niknam emphasizes Corning's fiber optics business, which at more than 30% of revenue, is the company's biggest revenue driver. Growth in this segment is "reaccelerating," says the analyst, and likely to grow at 14% annually between 2024 and 2027, driving "improved profitability and cash flow (without a material ramp in capex)."

Which makes sense. I mean, AI servers aren't particularly useful if they can't deliver answers to queries from AI users. And fiber optic cables are the go-to path for such communications. Logically, if the volume of AI traffic grows, the demand for fiber optic cables to carry that traffic will grow as well. And Corning, with a 17.5% market share in fiber optics, would be a logical beneficiary of that growth.

Is Corning stock a buy?

That still leaves the question of valuation. Growth aside, is Corning stock cheap enough to buy? Not at first glance -- not at all! With a $38.2 billion market cap but only $437 million earned over the last 12 months, Corning stock sells for 87 times trailing earnings. Even at 15% growth, that's a high price to pay.

Now, the good news is that Corning generates more free cash flow than it reports as net income -- $938 million over the past year. The bad news is this still leaves the stock trading for a pricey 41 price-to-free-cash-flow ratio. (And that's before counting debt.)

Bright as its prospects may look, Corning stock still costs too much.

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