Industrials Can Win In 2026, Thanks To The Rising Tech CAPEX
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Oakoff InvestmentsInvesting GroupFollow5ShareSavePlay(9min)CommentsSummaryI expect Industrials (XLI) (VIS) to outperform the S&P 500 in 2026, driven by sustained AI-related CAPEX and infrastructure buildout.Data centers could triple US power demand by 2030; that electrification buildout means spending on grid, equipment, automation, HVAC, and services accelerates for years ahead.Current valuations for XLI and VIS ETFs are above their 3-year averages, but robust net income growth and sector tailwinds justify overweighting in value portfolios.Between XLI and VIS, fees are similar, top-ten holdings match, yet VIS adds volatility and overdiversification; XLI is the cleaner, higher-quality exposure for 2026 positioning.Key risks include potential recession, hyperscaler CAPEX slowdown, and Industrials' cyclical nature, which could compress margins or delay orders. But I still think XLI can outperform SPY in 2026. Torsten Asmus/iStock via Getty Images If 2026 Is A Positive Year, Industrials Might Outperform Again A few days ago, I wrote that the S&P 500 index (SPX) (SP500) (SPY) (VOO) isThis article was written byOakoff Investments9.76K FollowersFollowOakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information. He leads the investing group Beyond the Wall Investing with features that include: a fundamentals-based portfolio, weekly analysis on insights from institutional investors, regular alerts for short-term trade ideas based on technical signals, ticker feedback by request from readers, and community chat. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in XLI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.