SMID-cap suppliers pivot to electrification demand
The guest argued that small-to-mid-cap industrial equipment makers are seeing structural growth as their products find new applications in utilities and data centers.
The argument
Companies that historically served legacy sectors like oil and gas or defense are now experiencing demand inflections from the utility and data center build-outs. The guest noted that these businesses are evolving from cyclical plays into secular growth stories.
The thesis, stress-tested
✓ What validates it
- ✓Powell Industries reporting continued order growth from utility and data center customers
- ✓Caterpillar tracking toward $40 per share earnings by 2029
▸ Risks discussed
- ▸Supply chain bottlenecks for critical electrical components
- ▸Potential slowdown in data center capital expenditure
Hear it yourself
"The new administration, the Trump administration has essentially embraced that same but also that that the same sort of strategy, but it has rather than making making here an option, making here is now, frankly, under the Trump administration, a mandate. So Biden wrote checks. Trump is using tariffs. I mean, the Biden administration essentially continued all the Trump tariffs from Trump one point o. So, as I said, I don't think we'll see a future president run on any platform that involves, let's go back to, shipping manufacturing abroad. And now let's just get on to the other aspect."
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