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3 Non-Tech Stocks Still Winning Big on AI
By Nathan Reiff. First Published: 7/13/2026.
Key Points
- Investors seeking AI exposure without direct tech-sector risk can consider Powell Industries, AAON, and EMCOR Group, all benefiting from data center demand.
- Powell Industries and AAON have posted strong backlog growth and revenue gains, but their share prices have already risen sharply, raising valuation concerns.
- EMCOR Group shows steady revenue and earnings growth with a more modest year-to-date gain, and analysts see further upside potential ahead.
- Special Report: Forget SpaceX. Buy the company Musk can't replace.
The AI-driven tech boom continues, but for investors worried about overexposure, it can be difficult to avoid some of the biggest names in technology. Even those looking for overlooked tech investment targets may want broader diversification across other sectors. After all, energy, industrials, and other parts of the market are also performing well.
It is absolutely possible to gain exposure to AI trends without leaning too heavily on tech names. Companies that provide data center services and equipment, including construction work, have been thriving despite not being part of the tech sector. The firms below all have the potential to continue benefiting as AI demand remains strong, but they will not add direct exposure to tech.
Massive Demand Increase for Powell, But Valuation May Be a Concern
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Powell Industries Inc. (NASDAQ: POWL) designs and builds customized power control and distribution products, along with a range of automation, metering, and data acquisition systems. While the company has traditionally served customers in the energy, mining, and utilities sectors, it has increasingly focused on data center clients.
Business appears to be accelerating, based on two major projects the company won in Q2 2026, each worth more than $75 million, and a post-quarter data center award worth more than $400 million.
This should help drive revenue growth going forward—the firm's $297 million in Q2 revenue was solid, but it was up only about 6% year over year (YOY), leaving ample room for improvement.
Gross margin declined modestly on a YOY basis, but backlog remains massive at $1.8 billion, up 33% YOY. The $490 million in new orders during the last quarter highlights the strength of demand for Powell's products, and the company is expanding capacity in a sustainable, self-funded way that has not yet required shareholder dilution.
The main question for investors may be whether the recent rally in POWL shares has room to continue. The stock has already returned about 120% year to date (YTD), and with a price-to-earnings (P/E) ratio of 45, it is not cheap. Analysts still favor it overall, though, with four Buys and three Hold ratings.
A Fast-Growing HVAC Firm Works to Build Capacity and Improve Margins
Cooling is a major engineering challenge for data centers, which must maintain appropriate temperatures to avoid hardware malfunctions. Industrial HVAC firms like AAON Inc. (NASDAQ: AAON) have become a pivotal part of the data center industry as a result.
AAON's recent financials show how important it has become to data center builders and operators: in Q1 2026, the company reported record quarterly net sales of nearly $497 million, up 54% YOY, as well as a backlog of $2.1 billion. That is more than double the backlog from just one year earlier, underscoring the momentum in data center demand for HVAC products and services.
As a result, AAON has updated its full-year outlook for 2026 and now expects sales growth of about 40% to 45%. Gross margin was somewhat less stable in the early part of the year, falling by 170 basis points YOY to 25.1%, but management expects it to improve to a range of 27% to 28% by the end of 2026 as AAON works to build internal capacity. In the meantime, capital expenditures (CapEx) will remain high after reaching about $53 million in Q1 alone.
Like Powell, AAON has risen rapidly this year, climbing about 48% YTD. Analysts still see it as a Buy, however, with four Buy ratings and two Holds, despite minimal upside potential.
Steady Growth From EMCOR, With Room Left to Run
While both companies above specialize in products or services that are vital to data center upkeep, EMCOR Group Inc. (NYSE: EME) is a broader electrical and mechanical contractor involved in data center construction. Its services range from HVAC to electrical installation, fire protection, automation, and more.
The company has continued to meet rising demand for its services—it posted nearly 20% YOY revenue growth to $4.63 billion for the first quarter of the year—while maintaining operating income of $404 million and improving diluted earnings per share (EPS) by about 30% YOY as well.
Even as its mechanical construction margins have become somewhat compressed, with operating margin falling to 10.9% from 11.9% a year earlier, this is likely due more to ongoing variability and pass-through work than to an inability to scale.
EMCOR heads into the second half of the year with strong performance and optimistic management, which sees full-year revenues reaching an impressive $18.5 billion to $19.3 billion, alongside EPS ranging from $28.25 to $29.75.
Shares of EME are up 27% YTD, a more modest gain than the other companies on this list, and still have another 12% upside potential according to analysts. Nine Buy ratings and two Holds suggest that Wall Street remains optimistic about EMCOR's ability to navigate a high-demand environment going forward.
Palantir's Wild Ride: Inside the Stock Wall Street Can't Agree On
By Chris Markoch. First Published: 7/17/2026.
Key Points
- Palantir Technologies continues to post exceptional revenue growth, led by U.S. government and commercial demand.
- New artificial intelligence and defense-related catalysts have helped support the bull case, but valuation remains the central concern.
- Institutional buying and analyst price targets suggest optimism, while insider selling and rich multiples keep skeptics engaged.
- Special Report: Forget SpaceX. Buy the company Musk can't replace.
Few stocks generate the visceral reaction that comes with the mention of Palantir Technologies (NASDAQ: PLTR).
What makes the debate so interesting is that both sides are absolutely convinced they are right, and both have data to support their case.
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For example, a little more than halfway through 2026, PLTR is down over 24%. Since the 52-week high in November 2025, the stock has fallen about 35%.
Score one for the bears, who argued for much of 2024 and 2025 that Palantir had already baked several years of stellar performance into its stock price.
Palantir Stock Rallies on AI and Government Contract News
The first two weeks of July provide a snapshot of what has been happening with PLTR all year. On July 1, Palantir shares jumped more than 9% in a single session. The catalysts arrived almost simultaneously:
A new NVIDIA (NASDAQ: NVDA) partnership to deploy AI models in secure government environments
Confirmation that Palantir's Foundry platform will serve as a data layer in the Army's high-priority NGC2 modernization program
A financial disclosure showing President Trump holds a stake in the company
A message that noted short-seller Michael Burry had trimmed his bearish bet against the stock
However, the enthusiasm cooled, and PLTR went back to doing what it's done for most of 2026: grinding sideways while investors argue about what it’s actually worth.
Palantir's Business Keeps Growing Despite Stock Volatility
Here's the part that confuses casual observers. Palantir's business hasn't struggled at all. First-quarter revenue grew 85% year over year, easily beating estimates. Management raised full-year guidance twice, now projecting roughly 71% revenue growth for 2026. U.S. commercial revenue alone surged more than 100%. By almost any operating measure, Palantir is performing better than ever.
And yet the stock is still down close to 20% for the year, even after its recent bounce. At one point this spring, shares had fallen nearly 30% from January's high, even as the company posted record numbers. The bulls argue that investors are undervaluing Palantir’s business. The counterargument is that a company’s business and its stock are different things.
Why Palantir's Valuation Keeps Dividing Wall Street
The answer mostly comes down to price. Even with the stock down over 20%, Palantir trades at a forward price-to-earnings ratio around 114x and a price-to-sales multiple that's around 70x. Both are among the richest of any large-cap software company.
At that valuation, a great quarter doesn't move the stock much. It just keeps existing expectations intact. Analysts have pointed out that Palantir's blowout Q1 earnings report actually sent shares lower the next session, because the market had already priced in near-flawless execution.
This is where buy-and-hold investors need conviction and patience. Being right about the company isn't enough. Investors who bought PLTR when it was below $20 or even below $60 are content to sit on “less profit” before the anticipated next leg higher.
Investors who started a position in PLTR when it was trading above $190 are sitting on potential losses, putting pressure on both bulls and bears.
Is Palantir Stock Too Expensive Despite Strong Growth?
Valuation isn't the only thing skeptics point to. Insiders, including CEO Alex Karp, have sold shares steadily and consistently, with essentially no offsetting purchases over the past several months. Karp alone has sold close to $2 billion in stock over the past two years.
It’s not unusual for an executive whose compensation is heavily stock-based, and pre-arranged selling plans are common practice. But for investors already nervous about valuation, concern over the optics is understandable: the people closest to the business keep taking chips off the table at elevated prices, even as they publicly champion the stock's long-term story.
Palantir Continues to Deliver Strong Government and Commercial Growth
None of this necessarily means the bears are right. Palantir has answered every “yeah, but” objection with a response that drives both revenue and earnings.
Critics say Palantir’s government business is at risk. However, the company’s government footprint continues to deepen. In fact, the NGC2 win embeds its software into one of the Army's most important modernization efforts.
Before concerns about government contracts, there was concern that it was too reliant on them. But its commercial base grew more than 30% last quarter, with expanding spending from existing customers adding even more revenue growth.
Despite that growth, the question remains: how much is that growth currently worth? For all the concerns over valuation, there are signs that the big money is bullish. The analysts' forecast is revealing, but not conclusive. Palantir’s consensus price target is $190.85, well above its recent trading levels.
Analysts generally believe that Palantir is undervalued. For the last several quarters, institutional buying has outpaced selling by more than 3 to 1. That suggests institutions may be positioning themselves for a strong move higher.
Can Palantir Earnings Spark the Next Move Higher?
What may be lacking is volume. PLTR has been trading on lighter volume, which has made both the rallies and the pullbacks appear stronger than they are. That could change when Palantir delivers its Q2 2026 earnings report on Aug. 3.
A strong report would offer clarity about the company’s future growth. Clarity isn’t the same thing as conviction. But investors who want the market to be efficient are often surprised when it’s not. PLTR commands a premium that investors are willing to pay, for now. The earnings report isn’t likely to change that, nor will it silence the company’s critics.
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