Top Fund Manager Strongly Recommends Two Under-the-Radar AI U.S. Stocks – Bullish on the Ripple Effect of the Coming AI Infrastructure Boom
In today’s red-hot AI trade, it seems everyone’s eyes are glued to the “Magnificent Seven” mega-cap tech giants. Even the world’s richest man, Elon Musk, recently recommended buying Google and Nvidia to bet on AI.
Yet a fund manager who has outperformed 99% of his peers over the past five years — Ryan Kelley, CIO of Hennessy Funds — is quietly pushing two little-known AI-related names.
According to Morningstar data, over the past five years, Kelley’s Hennessy Cornerstone Growth Fund (HFCVX) and Hennessy Cornerstone Mid Cap 30 Fund (HFMDX) have both beaten 99% of their peers.
In a recent interview, when asked where he sees the best opportunities right now, Kelley highlighted two holdings from his mid-cap funds:
- Sanmina Corporation (SANM)
A U.S. electronic manufacturing services (EMS) provider headquartered in San Jose, California. It serves OEMs in communications and computer hardware, operating nearly 80 factories worldwide and ranking among the largest independent manufacturers of printed circuit boards and backplanes.
- Dycom Industries (DY)
A leading U.S. provider of specialty contracting services for telecom infrastructure and utilities. The company supplies telecom carriers with the most critical resource — highly skilled labor — with hundreds of offices nationwide and unmatched scale and reach.
With over 16,000 employees, Dycom offers a full range of services: project management, planning, engineering design, aerial/underground/wireless construction, maintenance, fulfillment, plus underground facility locating for telecom and utilities, as well as construction and maintenance for electric and gas companies.
Kelley emphasizes that both companies are the latest iteration of the classic AI “picks and shovels” play: as long as hyperscalers keep pouring hundreds of billions into data centers, these two should continue to reap substantial benefits.
“Honestly, we still don’t know if artificial intelligence is truly a once-in-a-lifetime invention, but we will find out. In the meantime, we can invest in other parts of the market and other companies that will profit from this massive growth,” he added.
On Sanmina, Kelley said:
“They’re not making the chips — they’re making the server racks. They’re building the systems, servers, and infrastructure for these giant data centers.”
He also pointed out that Sanmina recently acquired ZT Systems from AMD, putting it in an even stronger competitive position. Despite the stock surging 103% last year, its forward P/E of 35× is only slightly above the Nasdaq 100’s average of 33× — still reasonably valued in his view.
On Dycom Industries, he said:
“We still need more and more bandwidth, and they play a critical role in that bandwidth expansion.” The stock rose 93% last year and now has a market cap of $10.4 billion with a forward P/E of 45×.
“Whether AI turns out to be as revolutionary as people hype it to be or not, this is a second- or third-tier company that benefits from the AI boom either way,” he concluded.