Five stocks to profit from America’s soaring electric power needs

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Today’s issue in preview:

• Five stocks to profit from America’s soaring electric power needs

• How to invest in the wake of this week’s biggest economic news

• One of our top themes is in “Super Boom” mode. Are you cashing in yet?

• Our extraordinary track record gets better: Our thematic trades in health care, pipelines, and defense run to new highs.

• Learn our Top Themes to buy today

How to invest in the wake of this week’s biggest economic news

Credit: gk-6mt

This week, a large industrial firm, Westinghouse Air Brake Technologies Corp. (WAB) (commonly known as Wabtec), reported results for the second quarter of 2026.

They were fantastic, which is important to you as an investor.

More on that in a second. But first, the results…

Wabtec’s second-quarter revenue reached $3.18 billion, up 17.5% year over year. Adjusted earnings per share jumped 21.6% year over year. Cash flow from operations more than doubled to $441 million compared to $209 million in the prior-year period.

Investors cheered these excellent results by sending Wabtec’s stock up 10% to a new all-time high.

This story didn’t make the front page, but it’s more evidence that the Made in America megatrend is in full swing… and that the U.S. economy is doing much better than most people think.

Wabtec is one of the most important manufacturing and service firms you probably don’t follow… or even know about.

Wabtec is America’s largest railroad equipment and service firm. Through its subsidiary GE Transportation, it is North America’s largest railroad locomotive manufacturer. It also makes a wide variety of other critical railroad system components, including braking systems, signaling systems, couplers, and bearings.

Wabtec employs the strong “razor and razor blade” business model, generating revenue from both selling maintenance services and consumables to railroad operators. After all, if you buy a $4 million locomotive, you want to make sure it has quality replacement parts and ongoing maintenance.

Serving in this role, Wabtec is a quiet but critical part of the U.S. economic machine.

Over the past year, we’ve made this big idea a core focus. Money & Megatrends readers in good standing are familiar with the bull case here…

President Donald Trump – along with many business and military leaders – believes that the U.S. has outsourced far too much of its industrial capacity to China over the past 25 years. We outsourced significant portions of our semiconductor, appliance, medicine, weapons, and machinery production. We outsourced the capacity to produce and process critical resources, such as rare earth elements.

The COVID-19 pandemic showed that depending on other countries for critical economic inputs makes the U.S. economy less safe and secure. To put it bluntly, it is very stupid not to produce critical national security products like AI semiconductors within our own borders.

Trump has staked his legacy and reputation on expanding our industrial base… and he’s working with business leaders to invest trillions to pursue this goal. Apple (AAPL), for example, has committed to invest $600 billion in U.S.-based manufacturing over the next four years. Nvidia (NVDA) says it will invest $500 billion in U.S.-based manufacturing over the next four years.

We’ve capitalized on this “Made in America” megatrend with strong returns in robotics, factory automation, and machine component makers such as Cognex (CGNX), Ouster (OUST), and RBC Bearings (RBC). Plus, new ideas in this trend include ESAB Corp (ESAB), Lincoln Electric (LECO), Xometry (XMTR), and Applied Industrial Technologies (AIT).

The Made in America megatrend involves building huge amounts of new AI data centers, high-tech factories, electrical infrastructure, and industrial machines. This will require transporting vast amounts of raw materials and manufactured products… which is bullish for railroad operators. It’s also a reason for them to invest heavily in their business by purchasing equipment, parts, and services from Wabtec.

Wabtec’s excellent results and new all-time high are sending us a clear message. Our railroads are booming. They are investing heavily in the future. The Made in America trend is in full swing. Manage your financial affairs accordingly!

Five stocks to profit from America’s soaring electric power needs

Credit: Jeremy Poland

Building lots of new AI data centers, high-tech factories, electrical infrastructure, and industrial machines for the Made in America megatrends sounds great, but how are we going to power them all?

Good question. I’m glad you asked.

By now, I’m sure you’ve heard about America’s power crunch.

Given AI’s enormous promise, large tech firms such as Google, Amazon, Microsoft, OpenAI, Oracle, and Meta have invested over $1 trillion in specialized semiconductors, data centers, and other AI infrastructure components. They are on pace to invest around $700 billion this year alone and more than $3 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort of all-time.

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. J.P. Morgan forecasts that global power demand will grow at a 3.6% compound annual rate from 2026 to 2030, a pace 50% higher than the previous decade.

Unfortunately, we do not currently have adequate electric power generation and distribution capacity to meet the ravenous needs of AI and other power consumers.

This is a major bottleneck for AI infrastructure and high-tech manufacturing. It’s safe to say America is desperate for more electric power generation and transmission.

This is bullish for IPPs, or Independent Power Producers.

IPPs are companies that own fleets of electric power plants and sell their production to the highest bidders. Unlike conventional regulated utilities that are tightly controlled by local governments, IPPs operate relatively freely. They can take capital expenditure risks that regulated utilities can’t make and charge higher prices that regulated utilities can’t charge. This makes IPPs higher-risk, higher upside investments than conventional utilities.

The group of established IPP stocks is relatively small. Back in May, I detailed how IPP giants Constellation Energy (CEG) and Vistra Energy (VST) are two leaders in this area… and owned by some of the world’s top hedge funds, such as Dan Loeb’s Third Point.

In addition to these two giants, investors can consider smaller IPPs such as NRG Energy (NRG), Talen Energy (TLN), and Canada’s TransAlta (TAC). NRG is a holding of top hedge fund manager David Tepper. Talen is a holding of top manager Scott Ferguson. These guys have enormous research budgets, teams of experts, and access to privileged information.

And they are buying IPP stocks.

IPP stocks enjoyed a big rally from mid-2023 to mid-2025. Since then, they have digested their gains and traded lower, with NRG, VST, and CEG recently reaching one-year lows. Given the electric power industry’s bullish long-term fundamentals, these stocks are likely to resume their long-term uptrends.

One of our top themes is in “Super Boom” mode. Are you cashing in yet?

Credit: angelp

Quest Diagnostics (DGX) just reported that business boomed during the second quarter of this year. Revenue jumped to $3.04 billion, up 10.2% year over year. Earnings per share jumped 15%.

The company said its full-year results should be on the upper range of Wall Street expectations.

Large institutional investors loved the numbers… and sent Quest shares up 11% this morning to new all-time highs.

If you have the faintest idea of how the U.S. health care system works, you know this is strong confirmation of our Boomer health care theme.

Quest is one of America’s largest health care diagnostics firms. Each week, it processes huge amounts of blood tests for lipid panels, fasting glucose tests, hormone levels, and more. It also provides advanced tests and screenings for cancer, STDs, workplace drug screens, kidney function, allergies, and diabetes.

Quest and its fellow diagnostics giant Labcorp (LH) enjoy a duopoly in many routine diagnostics fields, essentially. If you’ve ever had blood drawn and sent off for analysis, chances are very high that the job was handled by Quest or Labcorp. These two firms entered the health care diagnostics field early, built massive analytical capacity and networks, and now dominate the field.

This makes them key players in the Boomer health care theme. Constant Money & Megatrends readers know our longstanding bullish position on the Boomer health care megatrend.

More than 10,000 Americans reach retirement age every day. The U.S. population aged 80 and older is projected to roughly double from 14.7 million in 2025 to 29.4 million by 2045.

This is the enormous Baby Boom generation entering the phase of life where health care spending skyrockets. For many boomers, a typical month involves going to see at least one doctor to have something looked at, removed, or treated.

This means many health care businesses are experiencing huge demand now – and will for at least the next decade. It means boom times ahead for many “ology” businesses, stocks, and careers, such as dermatology, cardiology, radiology, oncology, anesthesiology, and ophthalmology. The list goes on. All the “ologies” will enjoy boom times.

This means investing in many health care businesses will be investing with a gale-force tailwind at your back. If you’re a parent and worried about your child getting a job, just point them to the booming health care industry. And if you like making money, keep it invested in health care.

But don’t take my word for it. Take the market’s word. Any stock price today is the sum total and final expression of all knowledge held by industry insiders, connected investors, government officials, and bankers who quietly control huge parts of the economy. These people know much more about their industries of focus than you or I do. Their knowledge manifests itself through action… and that action that sets market prices.

And today, they sent Quest Diagnostics to a new all-time high. Business is booming because more health care spending means more diagnostic spending. With this in mind, we remain “max bullish” on Boomer health care.

Market Notes

• Our recommendation to invest in the Boomer health care theme continues to pay off. Senior living giants Ventas (VTR) and Welltower (WELL) reached new all-time highs today. Genetic testing giant Illumina (ILMN) reached a new one-year high today.

• Our October 24 recommendation to invest in the defense industry is still performing well. Diversified defense giant General Dynamics (GD) reached a new all-time high today.

• Railroad giants Union Pacific (UNP), Norfolk Southern (NSC), Canadian National Railway (CNI) and CSX Corp (CSX) reached a new all-time high today. These are very bullish economic signals.

• Heavy truck manufacturing giant Paccar (PCAR) reached a new all-time high today. Read here to learn why this is a bullish economic signal.

• Our recommendation to invest in oil and gas pipelines continues to pay off. Pipeline operators Plains All American Pipeline (PAA) and Kinetik Holdings (KNTK) reached new all-time highs today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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