economy
An old economy sector may break out thanks to hyperscaler investment. Todd Gordon outlines how to play it
Another group has participated in the growth trade breakout and recently showed outperformance, creating a quieter AI revolution in this "old economy" sector.
TL;DR
- The industrial sector is participating in the AI growth trade, showing recent outperformance.
- Aerospace and defense, a significant component of Industrials, is boosted by increased defense spending.
- The Industrials ETF (XLI) exhibits bullish technical patterns, with potential for a rally to the $200s.
- The XLI/SPY ratio suggests industrials may outperform the S&P 500.
- Bloom Energy is highlighted for its role in powering data centers with solid oxide fuel systems.
- Sterling Infrastructure (STRL) is noted for building physical infrastructure for the AI economy, including data center sites and semiconductor fabrication campuses.