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1 Under-the-Radar Artificial Intelligence (AI) Stock Most Investors Might Be Overlooking
GLWCorning(GLW) The Motley Fool·2024-07-11 10:00

Core Insights - The article highlights the expanding opportunities in the artificial intelligence (AI) sector, particularly focusing on Corning as a key player in AI infrastructure, which is often overlooked compared to larger companies like Nvidia, Microsoft, and Amazon [1][2]. Group 1: Corning's Role in AI - Corning, with a market capitalization of 36.8billion,manufacturescomponentsessentialforconsumerelectronicsanddatacenters,positioningitselfasasignificantcontributortotheAIboom[1][2].−Thecompanyspecializesinglasscomponents,crucialforfiberopticcablesthatenablefastdatatransmission,whichisvitalforAIdevelopmentrequiringhyperscaleinfrastructure[2][3].−Corning′snewRocketRibboncableoffersa6036.8 billion, manufactures components essential for consumer electronics and data centers, positioning itself as a significant contributor to the AI boom [1][2]. - The company specializes in glass components, crucial for fiberoptic cables that enable fast data transmission, which is vital for AI development requiring hyperscale infrastructure [2][3]. - Corning's new RocketRibbon cable offers a 60% smaller diameter than competitors while maintaining a high fiber count, providing substantial space savings for data center operators [3]. Group 2: Financial Performance and Forecast - Corning reported 3.2 billion in revenue for Q1 2024, a 3% decline year-over-year, with its optical communications segment contributing 930million,down17930 million, down 17% [4]. - The company has revised its Q2 revenue forecast from 3.4 billion to 3.6billion,drivenbyincreasedsalesofopticalconnectivitysolutionsforAI[5].−Corning′s′Springboard′frameworkaimstoadd3.6 billion, driven by increased sales of optical connectivity solutions for AI [5]. - Corning's 'Springboard' framework aims to add 3 billion in annual revenue in the coming years, representing a 22% growth on its 2023 revenue of 13.6billion[4].Group3:InvestmentPotential−Corning′sstockisconsideredrelativelycheap,withaP/Eratioof25.8,whichisa2013.6 billion [4]. Group 3: Investment Potential - Corning's stock is considered relatively cheap, with a P/E ratio of 25.8, which is a 20% discount compared to the Nasdaq-100 index's P/E ratio of 32.3 [6]. - The company declared a second-quarter dividend of 0.28 per share, yielding 2.6%, which is higher than the dividends offered by Nvidia and Microsoft [7]. - Corning presents a compelling opportunity for investors looking to diversify their AI holdings or enter the AI space for the first time [8].