Inside the S&P 500 AI boom, industrials are getting as rich as tech stocks

The article argues that the S&P 500 industrials sector is trading at unusually rich valuations, with a forward P/E above 30, as investors increasingly treat industrials as an AI infrastructure trade rather than a traditional cyclical sector. Demand is being driven by data center construction, power-grid expansion, defense spending, and space-tech themes. Key beneficiaries include Caterpillar, GE Vernova, Emerson Electric, and Lockheed Martin, while industrials ETFs have seen strong inflows. The piece highlights Alphabet’s higher 2026 capex guidance of $195 billion to $205 billion and estimates that global data-center spending could approach $8 trillion by 2030, underscoring the scale of the buildout. Overall, the market impact is a broad re-rating of industrials linked to AI capex and geopolitical spending trends, with the sector attracting both passive and active investor money.