Big Tech's AI Spending Drives Industrial Stocks to New Heights

The AI boom is driving massive spending on infrastructure by Big Tech companies, with estimates suggesting they will spend $735 billion on AI data centers in 2026.

Amazon, Microsoft, Alphabet, and Meta Platforms are all increasing their capital expenditures to fund these initiatives. The majority of this money goes towards graphics processing units (GPUs), central processing units (CPUs), data center rentals, and memory manufacturers, but another group is benefiting from the AI boom: industrial companies.

Caterpillar, Eaton, and GE Vernova are all seeing growth in their segments related to power generation, electrical infrastructure, and electrification technology. Caterpillar's Power & Energy segment saw revenue increase by 17% year over year, with a strong demand for generators and turbines. Eaton's Electrical Americas segment grew 18% organically, with data center revenue surging 65%. GE Vernova's Electrification orders exceeded $5 billion, more than double its 2025 total.

The industrial companies are essential to the build-out of AI data centers, providing equipment and infrastructure for power generation, electricity transmission, and grid management. As Big Tech continues to invest in AI, these companies will likely see continued growth and demand for their products and services.