AI Rally Expands Beyond Tech Giants to Infrastructure Providers
JPMorgan strategist Stephen Parker says the AI rally is expanding beyond the 'Magnificent Seven' companies, which have barely budged this year despite markets reaching new highs.
Parker points to a group of infrastructure providers that are driving growth and taking the lead in the market. These companies include Quanta Services, GE Vernova, Eaton, and Cisco Systems, among others.
Quanta Services saw its adjusted EPS beat expectations by 39.93% in Q2, with revenue reaching $9.56 billion, up 41.1% year-over-year. The company's backlog hit a record $53.44 billion. Similarly, GE Vernova posted orders of $24.2 billion, up 88% organically, with total backlog at $176 billion.
Parker notes that AI is driving legitimate business results across the market, not just in tech but also in industries like consumer spending and banking. For example, Walmart's adjusted EPS beat expectations by 9%, and global advertising grew 38%. JPMorgan's Q2 results showed continued loan demand.