Forget AI, Buy 5 High-Flying Old Economy Bigwigs With More Room to Run

The article identifies five 'old economy' stocks—Comfort Systems USA, MasTec, JPMorgan Chase, GE Aerospace, and Howmet Aerospace—that have rallied over 30% year-to-date and hold favorable Zacks Ranks, indicating further upside potential. These companies offer portfolio diversification by capitalizing on indirect AI-driven demand for infrastructure and precision cooling, alongside robust secular trends in defense, commercial aerospace, and financial services, thereby broadening market gains beyond direct AI plays.

Analysis

The market rally is broadening beyond primary AI technology stocks, with significant momentum observed in established 'old economy' sectors that serve as indirect beneficiaries of major secular trends. Five companies—Comfort Systems USA (FIX), MasTec (MTZ), GE Aerospace (GE), Howmet Aerospace (HWM), and JPMorgan Chase (JPM)—have each posted year-to-date gains exceeding 30% and are identified with favorable Zacks Ranks, suggesting potential for continued upside. Industrials like Comfort Systems USA and MasTec are directly capitalizing on the AI infrastructure build-out; FIX is experiencing high-margin demand for specialized data center cooling, with expected earnings growth of 52.4%, while MTZ is leveraging the convergence of AI, electrification, and reshoring trends, projecting 60% earnings growth for the current year. In the aerospace and defense sector, GE Aerospace and Howmet Aerospace are benefiting from a recovery in commercial air travel and increased defense budgets. HWM projects robust earnings growth of 32.7% driven by wide-body aircraft recovery and F-35 program orders, while GE anticipates low-double-digit organic revenue growth in 2025 despite a projected -4.4% revenue decline this year, supported by 27.6% expected earnings growth and positive analyst revisions. JPMorgan Chase presents a more nuanced case, with its inclusion based on stable net interest income prospects, a strong investment banking pipeline, and significant AI investment for efficiency, even as it faces slightly negative revenue (-0.2%) and earnings (-0.6%) growth forecasts for the current year.

Key Decisions for Investors

• Investors seeking to diversify AI exposure beyond semiconductors should evaluate industrial firms like Comfort Systems USA (FIX) and MasTec (MTZ), which are positioned to capture growth from the data center infrastructure build-out with projected earnings increases of 52.4% and 60%, respectively.
• Consider positions in GE Aerospace (GE) and Howmet Aerospace (HWM) to capitalize on strong secular tailwinds in commercial aerospace recovery and elevated global defense spending, supported by projected earnings growth above 27% for both firms.
• For JPMorgan Chase (JPM), investors should weigh the company's slightly negative current-year growth forecasts against its strong market leadership, projected long-term interest income growth, and substantial technology spending before initiating or adding to a position.
• Given that these selected stocks have already rallied more than 30% year-to-date, it is prudent to monitor underlying industry indicators such as data center construction rates and airline build schedules to confirm that fundamental momentum can support further appreciation.