Wells Fargo says the AI boom is trickling down to old-line stocks such as GE and Caterpillar as demand for infrastructure and energy lifts industrials.
Wells Fargo explicitly names General Electric as a beneficiary of the AI boom, citing surging demand for its power generation turbines and grid equipment to support data centers. The company's energy segment is positioned for multi-year growth from AI electricity needs.
AI requires massive data centers that consume enormous electricity. GE's turbine and grid businesses are key suppliers for new power plants and grid upgrades, driving order growth and revenue.
Wells Fargo sees GE as a direct beneficiary of the AI infrastructure trend, likely with an overweight or buy rating, and expects earnings to accelerate as projects come online.
Caterpillar is highlighted by Wells Fargo as an old-line stock set to gain from AI-driven construction needs. The company's earth-moving equipment is essential for building data centers, power plants, and related infrastructure.
Construction of hyperscale data centers, solar farms, and upgraded transmission lines requires Caterpillar's bulldozers, excavators, and generators. The AI boom is a multi-year catalyst for construction equipment sales.
Yes, Wells Fargo suggested that the trend extends to other old-line industrials like Deere and 3M, but Caterpillar is a standout due to its direct exposure to data center construction.
Wells Fargo analysts see the artificial intelligence boom trickling down beyond tech, benefiting old-line industrial and energy stocks like General Electric and Caterpillar. Rising demand for power generation and data center construction is driving orders for turbines, grid equipment, and earth-moving machinery, broadening the equity rally. The bank views the trend as a multi-year catalyst that could sustain gains through 2026.
Wells Fargo analysts observed that the AI boom is no longer confined to tech companies. The demand for data centers, power generation, and advanced manufacturing is lifting industrial and energy stocks that were previously considered slow-growth.
Stocks like General Electric, Caterpillar, and potentially other industrials and utilities that provide the physical infrastructure for AI, such as power plants, transmission lines, and construction equipment.
Wells Fargo sees this as a sustained trend, driven by multi-year AI infrastructure investment. It likely extends the equity rally beyond the tech sector, providing broader market support through 2026.