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

The market's AI-driven bull run is broadening, with significant opportunities now emerging in 'old economy' sectors that are either directly supporting AI infrastructure or demonstrating strong underlying fundamentals. Five companies—Comfort Systems USA (FIX), MasTec (MTZ), JPMorgan Chase (JPM), GE Aerospace (GE), and Howmet Aerospace (HWM)—are highlighted for their year-to-date gains exceeding 30% and continued upside potential, driven by factors such as data center demand, energy expansion, robust financial services, and aerospace recovery. This indicates a shift towards a more diversified market rally, offering institutional investors avenues beyond pure AI plays.

Analysis

The AI-driven market rally is demonstrating a significant broadening beyond core technology stocks, with capital now rotating into 'old economy' sectors that are direct or indirect beneficiaries. This analysis highlights five such companies that have already appreciated over 30% year-to-date and exhibit further upside potential based on their Zacks Rank and positive earnings estimate revisions. Two distinct sub-themes emerge from the AI build-out: direct infrastructure enablers and parallel cyclical recoveries. Comfort Systems USA (FIX) and MasTec (MTZ) represent the direct enablers, capitalizing on the physical infrastructure required for AI. FIX is seeing surging demand for specialized data center HVAC, with projected earnings growth of 52.4% and a 2% upward revision in consensus estimates. Similarly, MTZ is pivotal in the energy and communications infrastructure expansion needed to power AI, reflected in its projected 60% earnings growth and a 2.6% improvement in next year's earnings consensus. In parallel, the aerospace sector shows robust, independent strength. GE Aerospace (GE) and Howmet Aerospace (HWM) are benefiting from a recovery in commercial air travel and elevated defense budgets. GE projects 27.6% earnings growth, supported by a significant 5.8% upward revision in current-year estimates, while HWM projects 32.7% earnings growth on strong commercial and defense orders. JPMorgan Chase (JPM) is presented as a more traditional beneficiary, though its flat current-year growth projections (-0.2% revenue, -0.6% earnings) stand in contrast to the others, even as it invests heavily ($18 billion) in technology to enhance efficiency.

Key Decisions for Investors

• Investors should consider diversifying AI-themed exposure beyond pure-play technology firms by examining ancillary infrastructure companies that are essential for the AI build-out.
• Evaluate direct infrastructure plays like Comfort Systems (FIX) and MasTec (MTZ), which exhibit exceptionally strong projected earnings growth of 52.4% and 60% respectively, tied to the data center and energy grid expansion.
• Consider opportunities in the aerospace sector, where firms like GE Aerospace (GE) and Howmet Aerospace (HWM) are showing strong earnings momentum and positive estimate revisions, indicating a robust cyclical recovery independent of, but concurrent with, the AI trend.
• While financials like JPMorgan (JPM) are included in the broader market upswing, their near-term flat growth outlook suggests they are a lower-beta play on this theme; monitor their substantial technology spend as a potential long-term efficiency driver rather than a near-term growth catalyst.