A stock at the nexus of the robotics boom and the U.S. manufacturing boom is soaring

Today’s issue in preview:

• A stock at the nexus of the robotics boom and the U.S. manufacturing boom is soaring

• This AI-powered boom could start a new leg higher soon

• One of our top AI power consumption bets runs higher. Stay long.

• Our hot hand continues: The E&C uptrend generates another winner… defense suppliers run higher

A stock at the nexus of the robotics boom and the U.S. manufacturing boom is soaring

Credit: SweetBunFactory

RBC Bearings (RBC) is proving that life is better when you have not one megatrend working in your favor… but two. RBC’s business is booming, and the stock is up 32% since we highlighted it in November. It’s a huge gain in less than six months.

In November, we detailed how RBC Bearings is one of America’s largest makers of precision ball bearings. Bearings are mechanical components that reduce friction between moving parts and support rotational motion. They are critical components in complex machines such as aircraft engines, helicopters, and robots.

Regular readers know that the robotics megatrend is one of my highest conviction investment ideas. We are in the early innings of a robotics boom that will deliver advanced industrial robots, humanoid robots, autonomous vehicles, and autonomous air taxis.

Another megatrend I’m bullish on is the buildout in U.S. manufacturing capacity. President Donald Trump and many business leaders believe that American economic security depends greatly on increasing the country’s manufacturing base.

Defense manufacturing. Auto manufacturing. Semiconductor manufacturing. Pharmaceutical manufacturing. More than a trillion dollars is set to flow into this megatrend.

At the nexus of these trends are companies that make critical components for industrial machines and robotics. Demand for their products is beginning to boom. RBC Bearings is one such company. In February, RBC reported 17% year-over-year revenue growth… driven by the strength of the trends mentioned above.

Both robotics and the American manufacturing capacity boom are big, multi-year trends. Giant trends such as these tend to persist and create great wealth. With this in mind, we’re still bullish on RBC.

This AI-powered boom could start a new leg higher soon

Credit: Henrik5000

After going through a sharp “Operation Epic Fury-induced” correction, it looks like the AI optical networking theme is poised to run higher.

Over the past month, we’ve highlighted how “AI demand shocks” are taking industries by surprise and generating extraordinary stock market winners.

AI “demand shocks” are very different from their more commonly known “supply shock” counterparts, in which a war or pandemic abruptly cuts off the supply of a resource like oil.

Instead, demand shocks are where demand for a specific resource or manufactured product suddenly skyrockets… and sends its price hundreds of percent higher. This creates boom times for the companies involved, as their unit sales and per-unit prices skyrocket simultaneously.

Twenty years ago, demand shocks for manufactured goods and natural resources were relatively rare. Businesses had time to anticipate new sources of demand and plan accordingly. For many industries, those days are over.

AI – the fastest-evolving technology in history and the focus of the largest capex spending cycle in history – has changed the rules.

AI’s power, adoption rates, and capacity are exploding… from just one quarter to the next.

AI is advancing at such a rapid pace… and large tech firms such as Google, Microsoft, and Amazon are spending such huge, unprecedented amounts of money on it (over $600 billion in 2026 alone) that AI-driven demand shocks are now happening every year… and creating the biggest, fastest stock market moves we’ve ever seen.

One industry experiencing a demand shock is optical networking. Optical networking equipment is a critical ingredient of the AI infrastructure boom. This equipment allows data to be transferred quickly and efficiently between parts of AI computing chains.

As a result of Big Tech’s enormous AI infrastructure spending, optical network equipment makers Lumentum (LITE), Coherent (COHR), and Cienna (CIEN) have enjoyed soaring revenues, and their stocks have returned hundreds of percent over the past 18 months.

However, the Operation Epic Fury-induced broad market correction hit these “highflyers” very hard. They fell 10%-22% from their highs.

Now that the end of Epic Fury is likely on the horizon, optical networking stocks are perking back up. Lumentum, for example, is up 7.8% today and is making a run at new all-time highs. CIEN and COHR look the same. Very soon, the big bull market in optical networking could be back on.

One of our top AI power consumption bets runs higher. Stay long.

Credit: imaginima

This week, shares of giant electrical infrastructure firm Quanta Services (PWR) hit a new all-time high. It’s yet more confirmation that our Power Grid Upgrade theme is one of the world’s strongest market trends

On October 7, I detailed how big tech firms Google, Microsoft, Meta, OpenAI, and Amazon are making the biggest business “bet” in history. They are spending hundreds of billions of dollars per year on data centers, AI chips, and other infrastructure components. Their total investment in this space will exceed $600 billion this year and will reach trillions more in the coming five years.

All that AI infrastructure is poised to consume huge amounts of electricity. Goldman Sachs forecasts global data center power demand will climb 50% by 2027 and as much as 165% by the end of the decade.

This creates a big investment opportunity.

The U.S. power grid is often called the world’s largest machine. It’s a giant network of power stations, transmission lines, substations, and underground wires. Most people barely know it’s there or how it works, but without this big machine, your lights don’t turn on, there’s no Netflix, and your iPhone doesn’t charge.

Industry experts say the power grid is aging and creaking under the strain of increased electricity demand. The American Society of Civil Engineers (ASCE) gave the energy sector a D+ in its 2025 Infrastructure Report Card, citing concerns about rising energy demand, aging infrastructure, and a lack of transmission capacity.

Soaring electricity demand… a grid badly in need of an upgrade… AI supremacy on the line… trillion of dollars of economic output on the line…

This is a recipe for a bull market in companies that build, repair, and upgrade our power grid.

This is a broad theme with individual leaders such as Quanta, MYR (MYRG), Hubbell (HUBB), Monolithic Power Systems (MPWR), and Eaton (ETN) on the investment menu. If you prefer ETFs, the mouthful-to-say First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) is an option. It owns a diversified basket of companies that manufacture electric grid components and perform grid-related installation/construction services.

As you can see in the one-year Quanta chart below, the market likes the Power Grid Upgrade theme. Epic Fury has had depressive effects on the broad market this week, so new all-time highs are few and far between. However, Quanta bucked the broad market weakness to reach a new all-time high. We remain bullish on the Power Grid Upgrade theme.

Market Notes

• Shares of AI infrastructure leader Vertiv (VRT) reached a new all-time high this week.

• Our recommendation to bet on Engineering & Construction (E&C) firms continues to pay off. Shares of big E&C firm Argan (AGX) reached a new all-time high today. The stock is up 887% over the past two years.

• The critical resources uptrend is alive and well. Shares of tungsten firm Almonty Industries (ALM) reached a new one-year high today.

• The defense megatrend continues to create winners. Defense industry supplier Innovative Solutions & Support (ISSC) – which we highlighted on February 27 – reached a new all-time high today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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