A Japanese toilet maker and seasoning giant are unlikely winners of the AI boom

The surge in artificial intelligence is not only benefiting major tech companies and chip manufacturers but also surprising players in other industries. In Japan, a toilet manufacturer and a seasoning giant are finding new opportunities in the booming AI market. Toilet maker Toto, renowned for its innovative bidets and heated toilet seats, has caught the eye of investors due to its production of electrostatic chucks. These components are vital in the fabrication of NAND memory chips, which have seen a price increase fueled by rising AI-related demand. Recently, UK-based activist fund Palliser Capital labeled Toto as "the most undervalued and overlooked AI memory beneficiary." Following this announcement, Toto's stock surged over 5%, adding to a remarkable gain of more than 54% over the past year. Meanwhile, Ajinomoto, a prominent food corporation celebrated for its umami flavor enhancers, is also emerging as an unexpected player in AI infrastructure. The company manufactures insulating materials essential for advanced semiconductor packaging. Its recent financial reports highlight a robust performance beyond its traditional food sector, with net profits rising by 8.9% and operating profits increasing by 5.6% year-on-year for the nine months ending in December. Following its earnings report on February 5, Ajinomoto's stock experienced a notable rise of 13%, contributing to an overall increase of over 56% in share value over the past year. However, not all non-tech firms are reaping the rewards of the AI boom. Daikin, recognized worldwide for its air conditioning systems, reported a decline in its operations due to a drop in semiconductor demand. The company recently adjusted its profit outlook, reducing its operating profit forecast by about 5% to 413 billion Japanese yen, or approximately $2.6 billion, for the fiscal year ending in March. In its February financial report, Daikin noted a staggering 44.6% year-on-year drop in operating profit, attributing this to the downturn in semiconductor demand and other market challenges. To mitigate these issues, Daikin plans to implement price increases and cost-cutting measures, but the company's stock took a hit, falling as much as 8.4% in Tokyo following the release of its financial results.