The AI hype has attracted many investors, especially with strong performers like NVIDIA, Arm, Microsoft, and Meta. While these stocks have seen massive price gains, investors are looking for alternative investment options. A surprising option could be Corning.

Corning, known for its expertise in glass and ceramic sciences, is not immediately recognizable as an AI company. Nonetheless, it benefits in multiple ways from the current AI boom.

The company manufactures Gorilla Glass for smartphones, which are increasingly being equipped with AI features. Manufacturers such as Sony, Samsung, Oppo, Xiaomi, and Apple are among Corning's customers. Since the iPhone 12 series, Corning has been supplying the "Ceramic Shield" glass to Apple.

In addition, Corning is active in the field of optical communications. The company manufactures fiber optic cables and other hardware products that are used both in the telecommunications industry and in businesses.

This is particularly relevant as the requirements for data transfers have massively increased due to AI. According to Corning CEO Wendell Weeks, systems with NVIDIA's Hopper H100 GPUs require ten times the amount of fiber optics compared to conventional server racks.

With the new Blackwell chip from NVIDIA, which is set to be released this year, the demand could further increase and double Corning's revenue per rack.

In its latest first-quarter report, Corning demonstrated a solid business foundation. Adjusted earnings per share were 38 cents, significantly exceeding the consensus estimates by 3 cents. Revenue also surpassed expectations, coming in at $3.26 billion compared to the anticipated $3.12 billion.

Our results for the first quarter were at the upper end of our forecast. Importantly, we are seeing encouraging signs of improving market conditions. We continue to expect that the first quarter will be the weakest quarter this year," said Weeks.

For the second quarter, Corning forecasts core sales of approximately $3.4 billion with core earnings per share of $0.42 to $0.46, which would exceed market expectations. The projected earnings are roughly in line with analyst estimates.

Despite these positive prospects, analysts are cautious with bullish ratings. After Corning stock has already gained around 32 percent in value so far this year and was last traded on the NYSE at $40.21, the average price target on TipRanks is $38.55, which is below the current price level (as of the close on June 18, 2024). Out of eleven analysts, five recommend buying Corning stock, and six have given a "hold" rating.

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