Dell, Corning, Coherent: JPMorgan's Top Picks For Cyclical Recovery 'Beyond AI'

As the tech sector pivots from AI-fueled growth to a broader market recovery, JPMorgan analyst Samik Chatterjee highlights a cyclical rebound powering upside for traditional IT infrastructure and industrial tech.

Top picks like Dell Technologies Inc DELL, Corning Inc GLW and Coherent Corp COHR are set to ride the next cyclical upswing from recovering demand in servers, telecom, and industrial markets.

At the same time, the analyst says Arista Networks Inc ANET, Cisco Systems Inc CSCO and Amphenol Corp APH stand to gain from networking and multi-sector recoveries.

Why These Three?

Chatterjee's strategy banks on recovery beyond AI-driven hype.

• The resurgence of traditional IT infrastructure demand should position Dell for long-term growth. Infrastructure investments and enterprise upgrades are expected to spearhead Dell's upside.

• Corning brings its diversified industrial tech portfolio to the table. With AI-driven telecom growth and a revival in optical and display markets, Corning is poised to shine as end-market recoveries take center stage.

• Coherent, a player in the optical sector, rounds out the trio with its diversified revenue streams. Chatterjee points to margin-expansion opportunities and AI-related synergies as key drivers for this pick, particularly as the company works through inventory digestion challenges.

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A Broader Tailwind Beyond AI – Arista, Cisco, Amphenol

The report underscores a robust cyclical resurgence in critical hardware and networking sectors. After experiencing downturns in late 2023 and early 2024, traditional IT infrastructure markets—encompassing servers, storage, and enterprise networking—are showing signs of substantial recovery. The analyst says companies like Arista Networks, Cisco, and Amphenol are strategically positioned to capitalize on these emerging networking opportunities and multi-market rebounds.

The PC market, for example, is expected to shift gears in 2025, with enterprise/commercial refreshes driving mid-single-digit growth. Similarly, the smartphone market, already seeing modest growth in 2024, is forecasted to accelerate next year, boosted by subsidies in China.

On the networking front, datacenter switches and wireless LANs are primed for the most substantial rebounds in 2025, reflecting enterprises' push toward datacenter investments.

This sets the stage for Arista and Cisco, both benefiting from secular shifts in cloud and AI-driven networking.

Dell, Corning, Coherent Lead The Charge

JPMorgan's call for a cyclical rebound beyond AI hype highlights a return to fundamentals, with Dell, Corning, and Coherent leading the charge.

With broader end markets poised for recovery, these names stand out as key beneficiaries in the next phase of tech and industrial growth.

Investors looking for opportunities in a post-AI frenzy market may find this pivot toward a cyclical recovery both timely and lucrative.

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