Updating One Of Our Top AI Stock Picks, Up 46% YTD

We’re tweaking the schedule we teased in yesterday’s Juice (see, Cost Of Living In Cities Around The World) to update an under-the-radar, dividend-paying artificial intelligence stock that we suggested at the beginning of June. 

In June, The Juice floated the idea of looking at Corning (GLW) stock because …

For as much as we believe in this (owning well-known AI leaders, such as Nvidia (NVDA)) as a core approach, it makes a ton of sense to broaden your scope at least a little. Think about stocks that don’t necessarily make the AI headlines, but stand to benefit from meaningful presence in the space …

The Juice’s personal favorite is the third most-searched Electronic Components stock in Trackstar right now, Corning (GLW). You might know Corning for its heavy-duty, scratch-resistant Gorilla Glass product that you find on smartphones and other devices. But you probably didn’t know that Corning is a major player in helping firms build out their AI infrastructure.

Fast forward more than a month and Corning is now the most-searched Electronic Components stock in Trackstar. In fact, search interest in GLW has increased by nearly 440% since we first wrote about the stock. 

As for stock price appreciation, Corning is up roughly 21% over the last month and about 46% year to date. 

A meaningful chunk of this upside has taken place over the last week because the company upped its guidance ahead of its July 30th earnings call:

The company now expects core sales of approximately $3.6 billion, compared with previous guidance of approximately $3.4 billion, with core EPS at the high end of or slightly above management’s guided range of $0.42 to $0.46.

Wendell Weeks, chairman and chief executive officer, said, “We expect second-quarter core sales to exceed our previous guidance and mark a return to year-over-year growth. The outperformance was primarily driven by the strong adoption of our new optical connectivity products for Generative AI. These results reinforce our confidence in ‘Springboard’ – Corning’s plan to add more than $3 billion in annualized sales in the next three years as cyclical factors and secular trends combine” (bold emphasis added). 

Even more bullish sounding, Corning anticipates that Q1 of 2024 will have been its “lowest quarter of the year.” 

If you go back to The Juice where we initially discussed Corning, you’ll see we dug into the company’s Q1 earnings conference call and paid close attention to its commentary on AI. It didn’t take a scientist who deals with rockets to read between the lines and see the writing on the wall. Corning strongly hinted that its AI business was trending up in a significant way. Clearly, the company came through and the story remains in progress with the narrative firmly intact. 

Is it too late to jump on the bandwagon? 

We don’t think so. 

If you got in for a short-term trade, it might make sense to take some profits. However, if you’re a long-term investor, we think there’s more near-term upside on the horizon. Beyond that, Corning is simply a great long-term stock. 

As we noted in that original discussion, this is an AI growth stock that pays a dividend. GLW yields about 2.5% on an annual dividend of $1.12 per share that it has increased for 13 consecutive years. 

We would be comfortable adding Corning to the list of names you buy regularly, especially during periods of broad market weakness. 

The Bottom Line: Artificial intelligence is a huge space that goes beyond Nvidia and clunky search tools from companies such as Meta Platforms (META) and Microsoft (MSFT). Use that clunkiness, amid strong growth at companies such as Corning, as a proxy for the reality that we’re in the early innings of AI. 

The best investors will not only be in the big names. They’ll be in the ones that don’t always make the headlines, but have other things — including, in Corning’s case, a strong dividend — going for them. 

In tomorrow’s Juice, we get back on schedule, looking at how the cost of new and used cars contribute to the current cost of living crisis. Next week, we dig deep inside some ETFs to unearth even more investing ideas.

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