Shares of companies supplying key materials and components for artificial intelligence (AI) infrastructure, centered on semiconductors, have been rallying in recent sessions. As the AI investment boom spreads across industries, unexpected players including glass, heavy equipment and toilet manufacturers are emerging as new AI beneficiaries.
According to the Wall Street Journal on Thursday, U.S. glassmaker Corning is drawing attention as a prime beneficiary of AI data center expansion. The company, which once supplied light bulbs to Thomas Edison, is now growing on the back of its fiber-optic cable business for AI data centers. Corning's fiber-optic cables have become a core connectivity backbone for large-scale data processing and a preferred infrastructure choice for hyperscalers, the operators of massive data centers.
Corning shares jumped about 12% on the day after Nvidia announced it would invest $500 million in the company to expand fiber-optic production for AI infrastructure. Market expectations have grown further as the partnership with Nvidia follows a supply contract with Meta earlier this year worth up to $6 billion.
Caterpillar, the heavy equipment maker known for excavators and bulldozers, is also reaping benefits from AI data center expansion. Demand for large-scale power generation equipment used in AI data centers is rising rapidly, driving a clear improvement in earnings.
Caterpillar reported first-quarter revenue of $17.4 billion, up 22% from a year earlier. Adjusted earnings per share (EPS) came in at $5.54, beating market expectations. The company plans to more than double its industrial turbine engine production capacity by 2030 to meet surging demand. It has also launched its largest factory investment in 15 years to expand production of piston engines used in power generators.
Japanese toilet maker Toto is also being cited as a hidden AI beneficiary. The company produces ceramic components used in semiconductor manufacturing processes. As that segment has grown rapidly, Toto shares rose 22% in May alone and are up more than 50% this year. British activist fund Palliser Capital reportedly described Toto in February as "the most undervalued and overlooked AI memory beneficiary."
Power and cooling system providers are also emerging as AI beneficiaries. AI data centers consume massive amounts of electricity while generating enormous heat, making stable power supply equipment and cooling facilities essential. Amid such expectations, shares of Vertiv have continued their steep rally, rising more than 2,000% over the past three years.
"These companies are literally serving as the picks and shovels in the build-out of AI infrastructure," said David Miller, chief investment officer (CIO) at Catalyst Funds. As long as the AI investment race continues, the benefits to suppliers of related equipment and materials are likely to persist.
However, some companies unrelated to the core AI industry are also seeking to ride the wave. Struggling sneaker maker Allbirds changed its name to "Newbird AI" in April, and its shares soared 582% in a single day.
