Artificial intelligence (AI) is driving significant growth and investment opportunities in various sectors. Top investors believe the AI frenzy is far from over, with many companies poised to benefit from this technology.
The utilities sector of the S&P 500 has returned 15% over the past three months, outperforming other sectors. Companies like Eaton, which makes power-management equipment, have seen their stocks surge 42% this year. Eaton's strong performance is expected to continue, with analysts predicting the company will nearly double its profit over the next five years.
Energy and materials stocks have also outperformed the broader market, with companies like Vertiv Holdings, which provides equipment for data centers, seeing their stocks more than double this year. Vertiv's strong demand is driven by the growing need for data center infrastructure to support AI applications.
The Global X U.S. Infrastructure Development ETF has returned 13% this year, outpacing the S&P 500's 11% advance. Companies like Quanta Services, which supplies skilled labor to power companies, have seen their stocks rise 31% this year.
Nvidia's earnings report showed strong demand for AI capabilities, with the company booking $26 billion in sales for its latest quarter. The company's stock is trading at record levels, more than doubling this year. As AI continues to drive growth and innovation, companies that are well-positioned to benefit from this technology are likely to see significant returns.
