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Today’s issue in preview:
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This sector could become “the next big AI trade” and produce dozens of huge winners
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This stock benefits from AI’s soaring power consumption
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Stocks for profiting from the American Smart Factory boom
This stock benefits from AI’s soaring power consumption
Credit: Yelantsevv
This week, the market sent us a clear message: The Power Grid Upgrade theme is alive and well… and full of opportunity.
The message comes via the 4.5% increase and new all-time highs reached by Valmont Industries (VMI).
Valmont is America’s largest manufacturer of power line transmission towers and steel poles. These are the 100+ foot-tall towers that support the power lines that make our modern way of life possible.
On June 4, we looked at Valmont and described it as a way to invest in the Power Grid Upgrade theme. The bull case for this theme is as follows:
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.
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… and trillions of dollars of economic output on the line. As we said in October, it’s a recipe for a bull market in companies that build, repair, and upgrade our power grid.
This theme – which we call the Power Grid Upgrade – has become one of the biggest home run trades of the past year. Since my note, power grid contractor Quanta Services (PWR) is up 68%. Fellow contractors MYR Group (MYRG) and Centuri Holdings (CTRI) are up 124% and 53%, respectively. Power plant turbine maker GE Vernova (GEV) is up 71%. Electric grid component maker Powell Industries (POWL) is up190%. These are large returns generated quickly.
By default, if you spend lots of money upgrading the power grid, you spend money on new power line towers. The Department of Energy aims to expand long-distance transmission line capacity by 16% by 2030, including the construction of over 7,000 miles of new power lines. This makes the future bright for Valmont.
As you can see in the chart below, the market is enthusiastically supporting the bull case for Valmont and the Power Grid Upgrade. This bull market has much further to run.
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This sector could become “the next big AI trade” and produce dozens of huge winners
Credit:piyaset
It’s official. The bull market in genomics is on.
Yesterday, one of our top ways to track and trade the genomic industry – the ARK Genomic Revolution Multi-Sector ETF (ARKG) – surged more than 4% to reach a new multi-year high. Plus, high-profile genomics leader Twist Bioscience (TWST) reached a new multi-year high.
As I stated on June 5, I track the genomics sector because I believe it could be “the next big AI trade” and generate many big stock winners over the next three years.
Genomics is the science of analyzing human DNA – often referred to as the “software code of life” – to create tests, medicines, and treatments.
Years of innovation in this field have us on the brink of creating many customized treatments based on an individual’s DNA… and even “editing” genes to cure disease. Bulls on the industry believe it will get a giant “AI boost,” since super-intelligent computer programs can analyze genes and treatment effects so well… and have the potential to create drugs on their own.
The fusion of AI plus genomics should generate dozens of compelling stock narratives over the coming years. Researchers running superintelligent AI programs will be able to run millions of digital simulations of drugs and treatments. This will put medical innovation into overdrive… and create many big stock market winners.
The personalized approach to medicine that genomics offers has us on the cusp of a historic revolution in healthcare. Ten years from now, medicine will be transformed… and a lot of money will be made along the way.
As I mentioned on May 28, ARKG is one way to track and trade the genomics theme. It owns a basket of bleeding-edge genomic companies. Its largest holding, Tempus AI (TEM), is often cited as a premier way to play “AI in health care.” ARKG also holds significant positions in genetic diagnostic service firms Natera (NTRA) and Illumina (ILMN)… plus positions in promising “gene editing” companies CRISPR Therapeutics (CRSP) and Intellia Therapeutics (NTLA).
As you can see in the ARKG chart below, the market likes the bull case for genomics. Money is starting to flow into this sector. And if the investment public begins to see it as another “AI trade,” returns will be large.
Stocks for profiting from the American Smart Factory boom
Credit: josemoraes
In March of this year, contractors cut down 330 acres of trees near Clay, New York. The clearing is one of the first steps in building a giant manufacturing facility for Micron Technology (MU), a computer memory giant.
The project is billed as a $100 billion+ “megafab project” and the largest private investment in New York state history.
Micron’s enormous facility is proof that the American Smart Factory boom is alive and well… and one of the market’s compelling investment themes.
Back in January, I made the case for investing in companies that supply critical equipment and services for building and operating high-tech, highly automated “smart factories.” The bull case here is simple…
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.
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. In addition to Micron’s plans, Nvidia (NVDA) says it will invest $500 billion in U.S.-based manufacturing over the next four years.
Semiconductor giant, Taiwan Semiconductor (TSM), plans to invest $165 billion in U.S.-based semiconductor plants, which would be the largest foreign direct investment in U.S. history.
Any factory competing in today’s economy must be highly automated. This means a large increase in U.S. manufacturing capacity must be matched by a large increase in the use of robotics, specialized semiconductors, AI programs, and machine sensory perception equipment.
This situation has made our recommendation of “smart factory stocks” like those inside the ProShares S&P Kensho Smart Factories ETF (MAKX) a big winner so far.
MAKX is based on an index that tracks companies that provide the equipment and services required to build and operate smart factories. Major holdings include machine sensory leaders such as Ouster (OUST) and Cognex (CGNX). It has a large weighting in Rockwell Automation (ROK), a leader in automated factory systems. The fund also owns specialized semiconductor makers with exposure to “edge computing” demand.
Business is booming for smart factory equipment and service providers. MAKX is up 44% this year and is close to new all-time highs.
The push to make the American economy safer and more secure by greatly expanding our manufacturing base is no “flash in the pan” trend. It will most likely be a decade-long megatrend that directs enormous capital flows into well-positioned leaders. I believe it’s only a matter of time before MAKX and many of its constituents break out to new highs.
Market Notes
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Our March 20th recommendation to own semiconductor equipment stocks is paying off. Lam Research (LRCX) and Applied Materials (AMAT) just hit one year highs. LRCX is now up 71% since our recommendation.
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Our recommendation to ignore the AI bears and stay long the AI boom continues to pay off. Leading computer memory giants Seagate Technology Holdings (STX) and Western Digital (WDC) reached new all-time highs today. Micron (MU), Intel (INTC) and Arm Holdings (ARM) also hit new highs.
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Our October 30th recommendation to own biotech is paying off nicely. Moderna (MRNA), Arrowhead Pharmaceuticals (ARWR), and Krystal Biotech (KRYS) all hit new highs today.
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Our April 15th recommendation to own Nebius (NBIS) hit another new high today. It’s now up 78% since our call in April.
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Our October 22nd recommendation to own the large banks is paying off. JP Morgan (JPM) and Morgan Stanley (MS) just powered to new highs.
Top Themes to Buy Now
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Regards,
Brian Hunt
Editor, Money & Megatrends
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