AI Buildout Pushes Industrials to Tech-Like Valuations in the S&P 500

A massive AI infrastructure wave is lifting the S&P 500’s industrials sector to tech-like valuations as data-center rollouts, rural power-grid upgrades, and heavy capex drive profitability. Alphabet’s elevated capex outlook and McKinsey’s trillion-dollar data-center forecast underscore the trend, boosting names like Caterpillar and GE Vernova, while defense stocks such as Lockheed Martin gain from higher spending. Broad ETF inflows into industrials reflect investor confidence that AI is expanding the sector’s growth runway, not just fueling tech.