Don’t Overlook AI Opportunities That Extend to Hardware

The best returns in the AI space have come from semiconductor designers and manufacturers. However, that’s just part of the hardware needed for AI programs to succeed.

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  • Investors have started to branch out, rewarding companies that make power distribution systems and  server racks. That’s still just scratching the surface. New devices will be needed to best utilize AI systems, and building out the next generation of technology will expand the hardware investment opportunities even further.

    One such opportunity might be in Corning (GLW). The producer of glass has been a major producer of specialty glass for smartphone touchscreens for years.

    Such technology will likely be part of new AI-enabled device sin the years ahead. That suggests that an AI-related boost is coming for shares in the years ahead.

    Currently, Corning shares are up 7% over the past year. That reflects the sluggish global market for smartphones. Corning posted a 19% increase in earnings, even as revenues dropped by 6%.

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  • But with shares trading at 20 times forward earnings, and higher growth potential ahead, shares may be an inexpensive buy for the longer-term AI rollout.

    Action to take: Investors may like shares at current prices. Corning also pays a 3% dividend at current prices.

    For traders, shares have been trending higher since October, and the trend looks likely to continue. The November $45 calls, last trading for about $0.50, could see high double-digit returns on a further gain in shares in the months ahead.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

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