Investors’ pursuit of the companies supplying key materials to the artificial intelligence build-out is powering an epic rally in shares of chip makers. Other companies caught in the frenzy include a 175-year-old glass manufacturer, a heavy machinery giant and Japan’s leading maker of toilets.
The AI trade has boosted stocks’ record run, with the S&P 500 climbing 1.5% to new highs on Wednesday after signs of progress on a Middle East peace deal and strong earnings from Advanced Micro Devices. It has also sparked volatility in markets, sending investors swinging between worries that AI won’t produce the expected blockbuster profits and fears it will disrupt entire industries.
Now, many are gravitating around key suppliers of the parts and materials needed to keep AI humming for years to come, confident those companies will profit no matter what. Here’s a look at some of the more unlikely winners:
Glass and fiber optics
Corning is among the latest companies to reap a windfall from the ripple effects of the data center build-out. Shares soared 12% on Wednesday after Nvidia announced plans to invest $500 million in the glassmaker to expand manufacturing of fiber optics, a key connective tissue for AI infrastructure.
Fiber-optic cables made by the company, which once manufactured lightbulbs for Thomas Edison, have become the preferred connectors for many hyperscalers, a reversal for a product that lost money for two decades. The Nvidia deal comes on the heels of an earlier agreement to sell cable to Meta in a multiyear deal worth up to $6 billion.
Diggers and data centers
Caterpillar’s stock surged after the equipment maker known for its ubiquitous yellow excavators and bulldozers reported higher profit and sales last quarter, boosted by strong demand for large power-generation equipment used in data centers.
The company is capitalizing, seeking to more than double its production capacity for turbine engines by 2030, and launching its biggest factory spending in 15 years, including $725 million at its Lafayette, Ind., plant to make more piston-driven engines for generators.
“Are they a pick-and-shovel? You can say they very much are in a literal way,” said David Miller, chief investment officer at Catalyst Funds, which has built big positions in companies at the “bottleneck to the build-out” of AI.
Toilets and ceramics
Toto, the Japanese toilet maker famous for its bidet Washlets, also makes ceramics used in semiconductor components and recently reported that sales of its electrostatic chucks more than doubled from a year ago, growing faster than any other business line. Shares have soared 22% in May alone, extending their 2026 climb to more than 50%, a rally that comes even as the Middle East war threatens to lift production costs.
In a presentation to investors at the end of April, Toto pledged to make its ceramics line a “core business,” after urging from the U.K.-based activist Palliser Capital earlier this year. Palliser presented a plan to Toto in February which called the toilet maker the “most undervalued and overlooked AI memory beneficiary.”
“There are quite a few sleepy Japanese companies who do one or two things really well… and all of a sudden they’re really in demand,” said Sean Sun, a portfolio manager for Thornburg Investment Management with a focus on international stocks.
Power and cooling
Data centers require loads of power and generate lots of heat. That has fueled rallies in companies such as Vertiv, which provides both power and cooling systems. Vertiv’s stock has surged more than 2,000% in the past three years, and shares of Asian companies providing similar services, such as Delta Electronics, have soared, too.
QuantumScape, which makes batteries for electric cars, is also repurposing its capabilities. The stock rose more than 14% in April after it announced it was targeting energy-hungry AI data centers and defense as new markets.
“It’s early days, but right now, I would call it a great addition to our automotive portfolio,” president Siva Sivaram told investors.
Sneakers, karaoke, and Raspberry Pi
Other companies are reaching beyond their traditional businesses to try to capture some of the momentum, moves that some investors said echo the online pivots of the dot-com era.
Struggling sneaker retailer Allbirds renamed itself NewbirdAI in April and sent shares on a dizzying 582% single-day climb. Former karaoke company Algorhythm Holdings rocketed 222% after a February news release about how its pivot to an AI logistics firm could cut down on empty-truck traffic and quadruple freight volumes.
A social-media post drove shares of Raspberry Pi up 36% in February after a user suggested that AI agents such as OpenClaw could drive up demand for the low-cost computer builder.
Write to Jared Mitovich at jared.mitovich@wsj.com