1、ab1 September 2025Global ResearchUS Electrical Equipment&Multi-IndustryTop 10 List(back-to-school edition)This note highlights the top 10 themes we believe will shape multi-industry fundamentals in the months ahead.We remain positive on industrial equities,though we await a broadening out of perform

2、ance.For example,the industrial group(XLI)is up over 16%year to date(vs.+10%for the broader market),but outperformance has been concentrated in specific end markets like power generation(GEV),aerospace(GE,HWM)and companies with idiosyncratic margin/cost opportunity(JCI).Industrial companies with low

3、 visibility and short cycle exposure have generally underperformed,with three of the five worst performing stocks in the XLI within the transportation sector.Our Top 10 List:Waiting for US industrial economy to return to growth;in the meantime,winners should keep winning.Were currently about three y

4、ears into the current industrial recession.This is the longest stretch of contraction in over half a century.The combination of favorable tax policy(passed into law on July 4),increased activity from lower short-term rates and improving confidence could take us back into expansion territory,though w

5、e have yet to see notable improvement in small business optimism post Liberation Day.If this happens,we could see meaningful further upside in the XLI from a broadening out of performance in favor of companies with more broad-based cyclical exposure.In the meantime,we believe winners will keep winni

6、ng.We note,NVDA said last week that it sees$3 to$4 trillion in AI infrastructure spend by the end of the decade.This is an annual number,which would imply about 6x current spending.This should allow industrial stocks exposed to AI infrastructure end markets to continue outperforming for years to com