3 Materials Stocks to Buy Before the Next Industrial Boom

The article argues that Cleveland-Cliffs, Air Products, and Linde are leveraged to the AI and data center buildout through steel, industrial gases, and helium supply. Cleveland-Cliffs has a U.S. monopoly on grain-oriented electrical steel, a market projected to grow 5.6% CAGR globally and 6.1% in North America from 2025-2030, while Air Products has a $9 billion backlog and Linde benefits from constrained helium supply due to war in Iran and Russia-related sanctions. The piece is largely bullish commentary rather than new hard news, so the likely market impact is limited.

Analysis

The real trade here is not “materials exposure to AI” in the abstract; it is scarcity plus embedded optionality. The companies with bottlenecks at critical points of the AI buildout can earn pricing power even if end-demand is lumpy, and that makes them better insulated than generic cyclicals. In this group, the best setup is where the market is still discounting old-economy earnings quality while the underlying assets become more strategically irreplaceable.

CLF is the most interesting asymmetry because the market tends to value it as a levered steel call, while the AI angle gives it a second claim on capital spend tied to grid buildout and data center infrastructure. The bigger second-order effect is that any acceleration in transmission/grid upgrades increases demand for specialized steel faster than headline data-center capex, so the revenue mix can improve before volume growth looks dramatic. That said, this remains a balance-sheet story, so the equity can work hard on narrative alone until refinancing or operating execution breaks the thesis.

APD and LIN look more durable than the article implies because industrial gases behave like utility-like toll roads once embedded in semiconductor workflows. The key is that supply constraint and geopolitical friction can keep helium and specialty gases tight even if the broader chip cycle softens, which should support spreads and contract renewals over the next 6-18 months. The market may be underestimating how much of the AI capex wave gets re-priced into consumables and services rather than the headline semiconductor names.

The contrarian view is that the thematic crowding is now moving from AI software into “AI picks-and-shovels,” which often compresses forward returns. If hyperscaler capex pauses, these names can still fall despite a healthy long-term story because the market is paying for near-term backlog conversion. The cleanest risk-managed expression is to own the bottleneck providers with contractual visibility, while avoiding the highest financial leverage and the names whose thesis depends on multiple expansion rather than earnings revision.

Key Decisions for Investors

• Long APD or LIN on 3-6 month horizon; prefer LIN for balance-sheet quality, APD for backlog leverage. Risk/reward: low-to-mid teens upside if AI capex stays firm, with lower drawdown than commodity cyclicals.
• Pair trade: long LIN / short CLF over 3-6 months. LIN has recurring, contract-backed cash flows tied to AI infrastructure; CLF has higher financing and execution risk. Use this to isolate “picks-and-shovels” quality over balance-sheet beta.
• Buy CLF only as a tactical trade, not a core hold; consider call spreads rather than stock over 1-3 months. Upside is meaningful if grid/data-center narrative gains traction, but downside is dominated by leverage and cyclicality.
• Use pullbacks in APD after guidance-related volatility as entry points for a 6-12 month hold. The market may be underpricing backlog conversion and pricing power, but avoid chasing after sharp momentum moves.
• If helium/geopolitical tension escalates, consider a long LIN / short a broad materials basket as a relative-value hedge. This captures the scarcity premium without taking full commodity-cycle risk.