雅虎香港財經 3 Overlooked Stocks to Play an AI Phone Supercycle
As generative artificial intelligence (AI) works its way into our laptops, tablets, smartphones, watches and even lapel pins, we may very well have the “killer” new feature to convince consumers to upgrade their hardware.
Whether new, capable “IntelliPhones” spark a red-hot supercycle (or a lukewarm refresh cycle) remains a big question on the minds of investors, specifically those hanging onto shares of Apple (NASDAQ:AAPL). If there’s a segment that needs a jolt, it’s the iPhone, which seems severely limited by the current state of Siri. Indeed, Siri in 2024 pales compared to almost any other generative AI product out there, including those put out by little-known startups.
With Apple’s biggest development conference of the year just days away, it’s about time investors got ready for analysts to update their standing on AAPL stock. Of course, it’s not just Apple that stands to gain from an AI phone cycle. Many rivals and component suppliers also stand to gain.
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Let’s check in with three overlooked and undervalued stocks to play the rise of an AI phone that could be very similar to the one featured in the 2013 film Her.
Corning (GLW)
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Corning (NYSE:GLW) is a lesser-known firm that stands to benefit if AI phones start flying off shelves again. The firm is best known for its legendary Gorilla Glass, which has helped modern smartphones shine in durability tests. Demand for Gorilla Glass will naturally increase as demand for the next generation of phones does.
For now, Gorilla Glass represents a relatively small slice of the overall Corning pie. Glass optical fiber and glass for other sorts of flat panel displays are the bigger needle movers for GLW stock. That said, in a truly “booming” IntelliPhone supercycle, I still view Gorilla Glass as a source of better-than-expected growth.
Though Corning doesn’t have an unbreakable solution (the holy grail for glass displays), it’s hard not to love the firm as it innovates to bolster protection on tomorrow’s smartphones. Apple Ceramic Shield is just one intriguing innovation that’s helped newer iPhones better withstand drops, fumbles and accidentally putting one’s phone in a pocket and one’s keys.
Look for future iPhones to adopt Gorilla Glass Armor, the next big leap in protection as Corning looks to fight scratches and reflections. For now, it’s unclear as to whether the iPhone 16 or 17 will boast the impressive new glass.
All considered, GLW stock isn’t a name I’d scratch off the radar at just 19.4 times forward price-to-earnings (P/E).
Qualcomm (QCOM)
Source: photobyphm / Shutterstock.com
If you believe smartphones will experience a once-in-a-decade refresh cycle, Qualcomm (NASDAQ:QCOM) is a top stock to consider. Unlike Corning, which has nothing to do with advancing a smartphone’s AI savvy, Qualcomm actually stands to power the incredible AI features of the next generation of high-end Android devices with its Snapdragon Series 8 Gen 3 chip.
Whether Android or Apple wins the AI smartphone wars, Qualcomm will stand to win. The company is still a critical modem chip supplier for the iPhone and will continue to be through 2026 despite Apple’s relentless efforts to build its own comparable device.
Given Apple’s lack of success in swapping out Qualcomm modem chips for its own, I’d be willing to bet Qualcomm’s modem chip deal with Apple could extend far beyond the next two and a half years. Either way, QCOM stock stands to be a winner in the face of any smartphone refresh cycle. The stock also looks like an absolute bargain at 20.6 times forward P/E.
Skyworks Solutions (SWKS)
Source: madamF / Shutterstock.com
Skyworks Solutions (NASDAQ:SWKS) remains overexposed to Apple despite the company’s ongoing efforts to diversify away from the iPhone maker. Indeed, if iPhone sales are down, the odds are that SWKS stock will be in an even bigger rut.
Today, shares of Skyworks are down nearly 53% from all-time highs hit back in mid-2021. Undoubtedly, iPhone sales were in a better spot during the earlier days of the pandemic, when consumers upgraded their devices amid lockdowns. These days, customers just haven’t had enough reason to upgrade to the latest and greatest.
In the second half, Apple is expected to reveal new AI features in iOS 18 while touting advancements in its Neural Engine. Should such AI innovations push customers to upgrade their iPhones en masse, I’d be willing to bet that SWKS stock could easily outpace AAPL stock over the next year.
Apple is riding high today after a mixed quarterly result, primarily because of its massive share buyback announcement. Meanwhile, SWKS stock is stuck in the ditches and is getting close to multi-year depths. At 17.2 times forward P/E, Skyworks looks like a relative bargain for those seeking more profound value than the iPhone maker.
On the date of publication, Joey Frenette held shares of Apple. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.
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