JPMorgan predicts IT and industrial tech will surge again

In December 2024, the tech sector demonstrated a notable shift from AI-driven growth towards a broader market recovery, particularly in the United States. Analyst Samik Chatterjee from JPMorgan emphasized the cyclical rebound expected in traditional IT infrastructure and industrial tech sectors, forecasting significant growth opportunities for companies like Dell Technologies Inc., Corning Inc., and Coherent Corp. due to recovering demand in various markets. The commentary underlines the potential for these companies to thrive amidst a resurgence in investments in infrastructure and enterprise upgrades, signifying a return to foundational growth principles rather than solely relying on AI hype. Chatterjee pointed out that Dell Technologies stands out with its robust positioning to capitalize on the resurgence in demand for traditional IT infrastructure, particularly servers and storage solutions. As the company benefits from infrastructure investments and enterprise upgrades, it is expected to pave the way for long-term growth. The resurgence in the demand for PC markets, which are expected to shift gears by 2025, also favors Dell's trajectory in this evolving landscape. This resurgence is fueled by anticipated enterprise and commercial refreshes, suggesting an increase in mid-single-digit growth. On the other hand, Corning Inc. leverages its diversified industrial tech portfolio to benefit from AI-driven telecom growth. The company is set to shine with the revival of optical and display markets, making it an attractive investment choice amid broader end-market recoveries. As the telecom sector integrates innovative technologies, Corning's diverse offerings place it in a strategic position to tap into the evolving market dynamics. Additionally, with the anticipated growth in critical infrastructure, Corning remains a pivotal player projected to experience significant benefits from these trends. Coherent Corp. is also highlighted as a key player in the optical sector, demonstrating a potential for margin expansion and AI-related synergies that will drive its growth. The company faces challenges with inventory management but stands to gain from the broader recovery of telecommunications and optical markets. In summary, the insights from JPMorgan underscore an optimistic outlook for traditional IT and industrial technologies as the US economy witnesses a resurgence in hardware and networking sectors, with companies like Dell, Corning, and Coherent leading this transition away from the AI-driven growth paradigm into more diversified recoveries across various market segments.