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Special Report 3 Picks-and-Shovels Ways to Invest in AI Without Betting on ChipmakersWritten by Leo Miller. Date Posted: 12/29/2025. 
Summary - While headlines swirl around chip developers and hyperscalers, many other stocks are benefiting from AI under the surface.
- EMCOR Group, Cummins, and GE Vernova each provide critical products and services that allow data centers and AI to proliferate.
- These stocks are up more than 35% in 2025, and analysts continue to see upside.
High-end semiconductors and large language models (LLMs) dominate the discussion when it comes to artificial intelligence (AI). Advanced chips are arguably the most important resource for developing AI, and LLMs are the main way people interact with it today. But building AI requires many industries to work together—from energy and construction to engineering and logistics. Speculation around the future of private space companies is accelerating as new technologies move closer to commercialization.
In a recent sponsor briefing, one analyst explores how satellite networks could reshape global connectivity and examines ways some investors are seeking indirect exposure to the space economy through publicly traded assets — without waiting for a formal IPO. The presentation outlines the concept, potential implications, and important considerations. Read the full sponsor briefing here AI may be built on cutting-edge chips and headline-grabbing models, but it runs on something far less glamorous: concrete, copper, turbines, transformers, and redundant power. Every new rack of GPUs needs a building to house it, cooling to keep it stable, and electricity that can't blink—even for a second. That's why a different class of winners is emerging from the AI boom: the companies that build data centers, keep them online, and expand the grid to feed their rising load. Among this group, three "pick-and-shovel" stocks are positioned to benefit: EMCOR Group (NYSE: EME), Cummins (NYSE: CMI), and GE Vernova (NYSE: GEV). Even after strong runs, Wall Street analysts still see meaningful upside in each name. EMCOR Group: Data Center Buildouts Are Pushing Contract Backlogs Higher EMCOR is one of the largest specialty contractors in the United States, providing electrical and mechanical construction services. The stock has performed very well in 2025, delivering a total return of approximately 38%. With one quarter left in 2025, analysts see EMCOR's revenue rising 15%. That would be the company's second-fastest annual revenue growth in the last 10 years, behind only 2024's 16% growth. Data centers have been a big part of EMCOR's story. Last quarter, the company said data center demand led remaining performance obligations (RPOs) in its Network and Communications end market to a record $4.3 billion. This figure has nearly doubled compared with a year ago. Currently, the MarketBeat consensus price target on EMCOR sits near $693, implying around 11% upside in shares. However, two price targets updated after the company's latest earnings release on Oct. 30 are considerably more bullish. DA Davidson and Robert W. Baird's Oct. 31 targets average out to nearly $757, suggesting shares could rise by about 21%. Cummins: Backup Power Demand Is Offsetting a Softer Truck Cycle Although many know Cummins for the heavy-duty engines it builds for diesel trucks, the company also has significant exposure to other markets. Cummins reported a 38% drop in heavy-duty truck component sales last quarter, yet the stock has delivered a total return of over 51% in 2025. That strength has come as the company's power systems segment picks up the slack. That segment posted revenue growth of 18%, with North American power generation equipment sales rising 27%, driven by data center demand. Cummins sells extremely powerful backup generators to data centers, allowing them to continue operating if they lose access to their main power source. These generators are critical because a power loss can make cloud-based applications unavailable, disrupting both a company's operations and its customers'. The MarketBeat consensus price target of $493 implies roughly 5% downside for CMI. However, price targets updated after the company's Nov. 7 earnings release tell a different story: their average is about $578, implying roughly 11% upside. Analysts Eye +20% Upside in GEV After Outlook Update GE Vernova, which serves data center demand through its power and electrification segments, has delivered a total return of 103% in 2025. The company is a direct play on the rising electricity demand that AI workloads can create. Its power and electrification businesses cover the chain from generation (including gas turbines) to delivery (including transformers and broader grid equipment). Last quarter, orders increased by 55%, and the company reported a total backlog of more than $135 billion. By 2028, GE Vernova expects its backlog to grow to $200 billion, with both its gas power equipment and electrification backlog doubling. The company also participates in the small modular nuclear reactor space and sees potential to generate orders from those products in coming years. The MarketBeat consensus price target of $691 implies less than 4% upside potential. However, after GEV issued a substantial update to its long-term outlook on Dec. 9, price targets released subsequently average around $817, suggesting about 22% upside. Three Ways to Own the Physical Infrastructure Behind AI EMCOR, Cummins, and GE Vernova illustrate a useful way to think about AI exposure: not just software and chips, but the real-world infrastructure required to build, power, and connect compute at scale. The trade-off is that these are still cyclical businesses. Data center capex can slow, project timing can slip, and power-grid bottlenecks can shift demand between quarters. Still, with backlogs, order momentum, and analyst targets that remain constructive even after strong runs, these three names sit squarely in the "picks and shovels" lane of the AI buildout.
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