This sector is soaring… and about to get an AI boost

Today’s issue in preview:

• The strongest, most profitable stocks you probably don’t own… but should

• Fantastic economic news going virtually uncovered in the mainstream media

• This sector is soaring… and about to get an AI boost

• Our hot hand continues: Theme recommendations AI power consumption, biotech space industry, and Brazil continue generating wealth and winners

The strongest, most profitable stocks you probably don’t own… but should

Credit: ugurhan

Last week, the Money & Megatrends Engineering & Construction Basket climbed 7.86% to reach a new one-year high. It’s up 40% so far in 2026.

This strong performance makes Engineering & Construction one of the world’s top-performing themes right now… and it makes our longstanding recommendation to own it a big winner.

In October 2024, I sent a note to colleagues that covered the bull case for E&C stocks. I described them as a way to invest in the AI data center building boom.

E&C firms design and build giant infrastructure projects such as airports, skyscrapers, power plants, transmission lines, and data centers. Well-positioned firms in this space are enjoying soaring revenues thanks to Big Tech’s race to build AI data centers and electrical infrastructure… a race that will see the likes of Google (GOOG), Open AI, and Amazon (AMZN) invest a colossal $600+ billion this year.

E&C firms also have a “Donald Trump” kicker in the form of our president’s efforts to massively increase U.S. manufacturing capacity. This push will see hundreds of billions of dollars spent on building new factories and the power grids required to operate them.

Given the extreme urgency behind Big Tech’s AI data center buildout and Trump’s manufacturing push, the bidding process for many infrastructure builds consists of E&C companies throwing out absurdly high bids… then Big Tech or the White House replying, “Sure, we’ll take five of them. Can you start yesterday?”

This is a good time to mention that we create, track, and trade “custom baskets” at Money & Megatrends.

Over the past 10 years, there’s been a huge increase in the number and variety of Exchange Traded Funds (ETFs) in the market. There are now more than 4,000 ETFs that represent many different asset classes and industries.

However, the world is changing too fast these days for the financial industry to keep up with everything. Many of the world’s most compelling, highest-upside themes are too new and too bleeding edge to have their own dedicated ETFs. These themes spring up and begin rewarding investors before ETF companies can design and introduce funds that represent them.

If you wait around for an ETF to be created for a theme before investing in it, you’re often going to miss out on incredible trades.

For example, in October 2024, I sent a research note to colleagues that said the quantum computing sector could be the next trade to catch fire. Soon after that, an equal weight basket of the four leading quantum computing stocks soared 1,100% in less than two months. At the time, however, there was no ETF that represented a pure play on those four companies.

With this in mind, we create, track, and trade theme-focused stock “baskets” at Money & Megatrends.

A basket is a group of stocks we create to track and trade a specific industry trend or investment theme. Typically, a basket will comprise five-to-ten stocks. An M&M custom basket’s price action represents the collective movements of the stocks it tracks, similar to an ETF.

We create a custom index when we feel there is no relevant ETF that accurately represents the theme we want to track and trade. This is the case with Engineering & Construction stocks. Our basket “owns” leading builders such as MasTec (MTZ), Argan (AGX), Primoris (PRIM), Quanta Services (PWR), and Sterling Infrastructure (STRL). The strength in these individual leaders is making our E&C basket one of the top performing themes of 2026.

Both the AI data center buildout and the manufacturing capacity buildout are big, multi-year themes. This means well-positioned E&C stocks will likely continue their winning ways.

Fantastic economic news going virtually uncovered in the mainstream media

Credit: aapsky

Last week, both Cummins (CMI) and Caterpillar (CAT) reached new all-time highs.

This is fantastic economic news going virtually uncovered in the mainstream media.

Many investors obsess over government data such as unemployment figures, job hirings, and the Consumer Price Index. I like to know that data as everyone else does. However, when I want a read on what’s really happening in the economy, I place far greater focus on what’s happening in the real world.

I look at stock prices. In doing this, I listen to the judge, jury, and executioner of any thesis, any trend, and any claim: The market.

Specifically, I look at the stock price action of companies and industries that make up the world’s economic core… companies sensitive to megatrends in manufacturing and infrastructure building. I look at companies like Cummins and Caterpillar.

Cummins is one of the world’s largest manufacturers of high-horsepower engines that power bulldozers, heavy trucks, excavators, and tractors. Caterpillar is one of the world’s largest makers of heavy construction equipment. It builds bulldozers, dump trucks, excavators, generators, and skid loaders. The market valuations and profits of both firms rise and fall with the world’s ability to fund and build giant infrastructure, real estate, data center, and transportation projects.

Both Cummins and Caterpillar have recently reported strong earnings driven by robust activity in the areas listed above. And importantly, both stocks climbed to new all-time highs last week.

The excellent earnings and fresh all-time highs for two of the world’s most important manufacturing companies tell us that despite some negatives, the global economy is generating plenty of positive activity. Getting the U.S./Israel/Iran conflict in the rear-view mirror would boost this already powerful trend.

This sector is soaring… and about to get an AI boost

Credit: Oselote

Today, the U.S. began blocking ships from entering or exiting the Strait of Hormuz. The aim is to increase pressure on Iran to reopen the critical oil route after peace negotiations collapsed.

If this situation is resolved without more missile strikes, we can look back and say the biotechnology theme truly had a good war. Like the utility sector, it passed the Epic Fury “stress test” with flying colors.

On August 18, I sent a research note to colleagues outlining my bullish view of the biotech sector’s price action. Since then, I’ve written more than a dozen updates on the biotech bull market, as the sector has outpaced the S&P by an incredible 45.7% to 5.8%.

The biotechnology sector is full of companies working on cures and treatments for hundreds of diseases. When investors grow interested in this industry, the returns can be incredible. During the last biotech bull market, the sector soared 300% over four years.

Since biotech has performed poorly since 2021, most investors are indifferent to it. But I see major potential here. I believe this industry could start regularly generating stock market doubles and triples.

The fusion of AI plus biology will generate dozens of compelling stock narratives over the coming years. Researchers running super-intelligent AI programs will be able to perform millions of digital simulations for drugs and treatments. This will put medical innovation into overdrive… and create many big stock market winners.

Companies that leverage AI to “crack the code” for various diseases, treatments and drugs will enjoy 100%… 500%… even 1,000%+ stock rallies.

In many cases, these rallies will happen thanks to stories and potential… rather than a company generating revenue or earnings. Capitalizing on many of today’s biggest stock market trends means focusing on promise over profits. The biotech sector holds the potential for both.

But don’t take my word for it. Take the market’s word. Since Epic Fury started on February 28, the SPDR S&P Biotech ETF (XBI) is up 3.35% and reached a new one-year high today. Meanwhile, the benchmark S&P 500 is down 0.85% and still below its January high. In other words, biotech demonstrated very impressive “relative strength” in a weak market.

During periods of market weakness, I look for which stocks, ETFs, and themes are holding steady or advancing. It’s a “stress test.”

If the market drops 3%, you want to see what drops just 1%. If the market drops 2%, you want to see what climbs 1%. That sort of thing. This is often called “relative strength.” It allows you to spot the safer, sturdier megatrends for investment.

It’s like looking at a beachfront neighborhood after a hurricane. Some homes lost their roofs, and some homes were blown away. But some homes were unbothered by the storm. Those are the strongest homes.

The biotech sector’s strong relative strength indicates the fundamental forces behind it are powerful. It’s yet another bullish development in the biotech bull market. It hit new a new high today, and more are likely to follow.

Market Notes

• Our recommendation to own AI semiconductor leader Marvell Technology (MRVL) is paying off. The stock reached a new all-time high today.

• Our February 13th recommendation to own the optics theme is still paying off. Two optics small caps, Syntec Optics (OPTX) and Lightwave Logic (LWLG) just hit new yearly highs.

• Clothing and shoe giant Nike (NKE)reached a new multi-year low today. A host of cooler, newer, and smaller brands are eating into its market share.

• Leading AI Power Consumption firm GE Vernova (GEV) reached a new all-time high today.

• Space industry leader Intuitive Machines (LUNR) reached a one-year high today. We highlighted the stock in January in our “orbital compute” trend piece.

• Our September 2025 recommendation to own Brazilian stocks continues to pay off. Brazilian energy giant Petrobras (PBR) reached a new one-year high today. It’s at the center of two megatrends we have been very bullish on: Brazil & energy.

Regards,

Brian Hunt
Editor, Money & Megatrends

An urgent message from our colleagues:

Trump Admin to Pump $1 Billion into this “Off-the-Radar” AI Stock

The U.S. government pumped more than $1 billion into Intel. The stock popped 128%. It pumped $400 million into MP Materials. The stock popped 200%. It bought 10% of Trilogy Metals. The stock popped 500%. And now, Trump has chosen this AI stock for a $1 billion payday.

Click here for the full story and stock pick (free).