The industrials sector of the S&P 500 is now trading at a price-to-earnings ratio above 30, well above its historical average of around 20, rivaling tech sector valuations. This surge is driven by massive AI data center construction, with global spending projected to reach nearly $8 trillion by 2030 according to McKinsey. Caterpillar and GE Vernova have each gained over 50% this year, with Caterpillar stock up nearly 160% over two years. Industrial ETFs have collected approximately $23 billion in net flows year-to-date, with over 60 vehicles targeting this sector.
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