Inside the S&P 500 AI boom, industrials are getting as rich as tech stocks - CNBC

What the report says

CNBC reported that the S&P 500 industrials sector has become a major beneficiary of the artificial intelligence infrastructure boom, pushing its forward price-to-earnings ratio above 30, compared with a longer-term norm closer to 20. The report said investor interest now resembles the enthusiasm typically associated with technology stocks, as companies tied to construction, power equipment, electrification and data-center support gain from the AI buildout.

The article connected the rally to large capital spending plans by major tech firms, including Alphabet’s latest forecast for 2026 capital expenditures of $195 billion to $205 billion, above its earlier range. CNBC also cited McKinsey estimates that global data-center spending could approach $8 trillion by 2030, much of it for infrastructure and IT equipment. The expansion is expected to require substations, grid upgrades, fiber networks, batteries, backup power and heavy machinery, particularly as new data centers move into rural areas with more limited power capacity.

CNBC said industrial ETFs have also attracted strong inflows, with VettaFi citing roughly $23 billion in year-to-date net inflows across more than 60 industrials funds. Within the Industrial Select Sector SPDR Fund, machinery and electrical equipment companies are significant holdings, and stocks such as Caterpillar and GE Vernova have posted large gains this year, though GE Vernova’s wind business has remained under pressure.

The report added that AI is not the only driver. Aerospace, defense and space-related companies have helped support the sector amid higher defense spending and investor interest in security and resilience. The broader significance is that AI-related investment is spreading beyond software and chips into older industrial businesses, while raising concerns about stretched valuations, grid strain and local opposition to data-center development.