Corning (GLW) Among Hidden Winners To Watch In AI Investing Space

SUMMARY:

The rapid expansion of artificial intelligence is driving an enormous build-out of data centers, with total investment expected to reach unprecedented levels. While major AI companies dominate headlines, much of the real opportunity may lie in less visible businesses that provide the infrastructure behind the scenes. These “glue” companies supply the materials, networking, and connectivity that allow AI systems to function at scale.

Fiber optics, cables, and server infrastructure are critical as massive volumes of data must move quickly and efficiently, which places firms with long histories in networking and communications as potential benefactors from this demand. This includes Corning Inc, which develops and manufactures specialty glass, ceramics, and optical physics-based products. The company recently announced a multiyear partnership with Meta, to assist in their US data center buildout.

“If you’ve ever seen what a data center looks like, it’s racks and racks of servers and things of that nature,” 24/7 Wall St. Analyst Lee Jackson explains. “Corning makes fiber-optic fiber that’s being used in a lot of AI data centers because when you’re having to put through gigantic amounts of data it has to travel on light and fiber optics – it’s not going through coax like your cable. So I would suspect that Corning is a player in that area.”

TRANSCRIPT:

Doug: Lee, there are some hidden winners in the AI business. When you look at what’s happening with the data center build-outs, the forecast is that this year or next, the total investment in data center build-outs will be a trillion dollars. So who’s going to make money in that that no one ever hears about?

Lee: Well, I think a couple of the companies I can think of – and one had outstanding earnings today – was Corning (NYSE: GLW) | GLW Price Prediction. And if you’d like to know what GLW stands for, in the old days Corning was called glassworks. I know this because I had a client that worked at JDS Uniphase and schooled me on this. Corning makes fiber-optic fiber that’s being used in a lot of AI data centers because when you’re having to put through gigantic amounts of data it has to travel on light and fiber optics – it’s not going through coax like your cable. So I would suspect that Corning is a player in that area.

If you’ve ever seen what a data center looks like, it’s racks and racks of servers and things of that nature. One big company I think is involved is Cisco Systems (NASDAQ: CSCO) – they make infrastructure. They were a big part, if you remember, of the build-out for the internet. Cisco was a big player for broadband and the internet, so I would suspect that. We talked about this recently: Cisco just finally surpassed the high it was at in like 2001, which was $80 or something. They just finally surpassed that after 24 years, which proves that if you hold onto a stock long enough maybe you will get your money back if you’re down.

But yeah, I would take a look at Cisco in that space. Also, and I’m not one hundred percent sure about this, but I think I’ve read enough that Amphenol, which makes cables and cording and things of that nature, is involved. I’m not sure of the exact symbol – it might be APH – but I think Amphenol is one to look at. I’m not saying it’s for sure involved, but from what I’ve read they’re involved in AI infrastructure. And again, the contractors that are pouring all the concrete to build these places – I think there are some industrial companies that will benefit as well.

Doug: If you’re an investor and you feel like the AI companies have had their big run-ups and the utilities have had their big run-ups as suppliers, I would start to look around at all the other companies that are not really visible in the Wall Street Journal or the Financial Times. I’d start to look and say, okay, it’s not just utilities and AI companies – where’s the glue? If I were an investor right now, I’d start to look for the glue. There are glue companies out there and they’re probably undervalued because their name isn’t in the newspaper every day.

Lee: Yeah, and again, I’m sure if you went to ChatGPT or Claude or any of them and just asked who are the companies providing infrastructure pieces to AI and data center build-outs, you could probably get a list of five or six right away.

Doug: Use AI to find investments in non-AI companies that are making money off AI.

Lee: Exactly, thank you. You put it in a nutshell. I don’t think we need to say anymore.