Brian G
Engineer & CFA, Trend-Based Market Analysis
The Magnificent Seven look better than grid and electrical equipment stocks, which carry some of the most egregiously high valuations. That group spans power equipment such as GE Vernova and ABB, switchgear from Powell and Eaton, cooling and panels from Vertiv and nVent, plus modular nuclear, fuel cells and batteries. A failed breakout on Eaton's weekly chart would be a big blow to the AI trade. x.com x.comÂ
MAGS's seven major holdings are betting heavily on AI, guided by leaders with the best view of its future. There is no doubt the ETF will have its best year in 2027 or 2028, despite today's skepticism. x.comÂ
Nexans' huge leverage to European grid spending makes its shares look too cheap for a company of its quality. The stock trades at roughly 13x consensus 2027 earnings and sold off with data-center infrastructure stocks despite AI accounting for under 5% of revenue. Management guides to positive single-digit growth into 2027, with large-project tendering picking up in the second half of 2027 through 2028. x.com x.comÂ
Electrical infrastructure ETFs such as GRID and PAVE are the preferred way to play AI-driven power demand. The companies supplying energy and services to data centers are large names such as Eaton, Vertiv and GE Vernova. x.comÂ
Investment in the power grid is being underestimated: annual grid investment is expected to run about $600B through 2030. The best smart-grid plays are Itron in energy resource management, MYR Group in transmission and distribution lines, GE Vernova in grid equipment and Eaton in power management, and none of them looks overvalued. x.comÂ
Crowded AI infrastructure and semiconductor trades have already priced in years of growth, while beaten-down power and utility stocks remain fundamentally strong. Utility names look preferable to most of those stocks moving forward; accumulate quality into capitulation and deeply oversold conditions rather than chase the crowded trades. x.comÂ
The iShares Top 20 U.S. Stocks ETF is a way to avoid the volatility drag that comes with the Roundhill Magnificent Seven ETF. x.comÂ
The Magnificent Seven ETF has drawn its largest institutional buying volumes ever over the past six months, while low-conviction traders misprice it on short-term uncertainty. It has now hit a new all-time high, and the setup favors steadily dollar-cost averaging in. x.comÂ
Durable demand makes these eight companies attractive at forward earnings multiples below their historical medians. Vistra has long power deals; ASML expects demand above capacity in 2027-28; GE Vernova's turbines are sold out through 2028. Eaton expects data-center deliveries from 2028. Waste Management leads garbage collection; American Tower has $23B in scheduled rent, Linde $64B in commitments, and BWX Technologies an $8.4B backlog backed by Navy demand. GE Vernova's multiple is still high. … Show more
The Magnificent Seven are now responsibly priced after being expensive, and in two years today's prices will look like an obvious buy. US tech now trades at a PEG ratio below almost every other index. x.com x.comÂ
Forgent Power Solutions is the highest-upside energy infrastructure stock, a picks-and-shovels play on expanding and upgrading the electrical grid that could be worth $60+ versus about $38 today. @TrackNetWorth counters that grid connection delays will cap the upside before it reaches that target. x.com x.comÂ
