Industrials and utilities sectors are benefiting first from the current wave of AI-related capital spending, as they provide the physical infrastructure like data centers and power grids needed for AI systems. Meanwhile, technology companies, despite driving AI investment, may see delayed earnings growth and face valuation challenges due to stretched prices and rising interest rates. This shift highlights opportunities in sectors tied to physical infrastructure and energy, contrasting with the higher near-term risks in tech stocks, which depend heavily on future cash flows. Investors should consider sector-specific funds like State Street's industrial and utilities ETFs for exposure to these trends.
The Utilities Select Sector SPDR Fund (XLU), focused on regulated utilities, has gained 7.03% year-to-date, lagging behind the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID), which is up over 23%. GRID invests in equipment ...
Financial advisors are increasingly favoring sector ETFs over mutual funds, with ETF allocations expected to surpass mutual fund allocations by 2027. This shift is driven by a decline in corporate dividends, replaced by share buybacks, prompting advi...
Barclays increased its year-end 2026 S&P 500 target to 7,800 from 7,650, driven by a stronger earnings outlook for U.S. companies. The bank raised its 2026 earnings-per-share estimate to $337, expecting about 21% annual growth from 2025. Despite trim...
