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Today’s Bonus Story

3 Picks-and-Shovels Ways to Invest in AI Without Betting on Chipmakers

Authored by Leo Miller. Published: 12/29/2025. 

Article Highlights

• 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 AI today. But building and operating AI systems requires many different industries to work together—from energy to construction to engineering.

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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 expect EMCOR’s revenue to rise about 15%—its second-fastest annual growth in the past decade, behind only 2024’s 16%.

Data centers have been a major driver. Last quarter, the company said data-center demand pushed remaining performance obligations (RPOs) in its Network and Communications end market to a record $4.3 billion, nearly double the level from a year earlier.

Currently, the MarketBeat consensus price target on EMCOR sits near $693, implying roughly 11% upside. Two price targets updated after the company’s Oct. 30 earnings release—by DA Davidson and Robert W. Baird—average near $757, suggesting about 21% upside.

Cummins: Backup Power Demand Is Offsetting a Softer Truck Cycle

Many investors know Cummins for the heavy-duty engines it builds for diesel trucks, but the company has diversified operations.

Cummins reported a 38% drop in heavy-duty truck component sales last quarter, yet the stock has returned over 51% in 2025. That performance reflects strength in its power systems segment, which reported revenue growth of 18%. North American power generation equipment sales were up 27%, driven by data-center demand.

Cummins supplies high-capacity backup generators to data centers, enabling them to remain operational if the primary grid fails. Those generators are critical: losing power can make cloud services unavailable and disrupt customers’ operations.

The MarketBeat consensus price target of $493 implies about 5% downside for CMI. However, price targets updated after the company’s Nov. 7 earnings release average roughly $578, implying near 11% upside.

Analysts Eye +20% Upside in GEV After Outlook Update

GE Vernova, which addresses data-center needs through its power and electrification segments, has returned 103% in 2025.

The company is a direct play on rising electricity demand from AI workloads. Its power and electrification businesses span generation (including gas turbines) to delivery (transformers and other grid equipment).

Last quarter, orders increased 55%, contributing to a total backlog of more than $135 billion. By 2028, GE Vernova expects its backlog to grow to $200 billion, with its gas power equipment and electrification backlogs each doubling. The company also participates in the small modular nuclear reactor market and expects that to generate orders over time.

The MarketBeat consensus price target of $691 implies under 4% upside. However, after GEV issued a substantial long-term outlook update on Dec. 9, subsequent price targets average around $817—about 22% upside.

Three Ways to Own the Physical Infrastructure Behind AI

EMCOR, Cummins and GE Vernova illustrate a practical way to gain AI exposure: not only through software and chips, but via the physical infrastructure required to build, power and connect large-scale compute.

The trade-off is that these businesses remain cyclical. Data-center capex can slow, projects can be delayed, and grid constraints can shift demand between quarters. Still, with growing backlogs, order momentum and analyst targets that remain constructive after strong share gains, these three companies sit squarely in the “picks and shovels” lane of the AI buildout.

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