These underperforming groups may deliver AI-electric appeal. Here's why.

As industrial and infrastructure stocks prepare to gain traction alongside the burgeoning artificial intelligence sector, analysts are optimistic about the market's potential. Mike Atkins from ETF Action highlights a promising landscape shaped by evolving policy and consumer preferences, especially during a turbulent period for major technology and AI companies. Atkins pointed out that traditional industrial products, which have historically underperformed, are experiencing renewed interest. He stated, "There’s a significant shift away from globalization toward a reshoring strategy, and I believe this trend has staying power." Ryan O'Connor, CEO of Global X, shares this positive sentiment, emphasizing the connection between infrastructure development and the AI expansion. His firm manages the Global X U.S. Infrastructure Development ETF (PAVE), which tracks companies engaged in construction and industrial activities. "Infrastructure development is central to our focus with PAVE, which stands as our largest ETF in the market," O'Connor remarked during a recent interview. He believes that the reshoring initiatives related to infrastructure could be quite beneficial. Currently, the Global X infrastructure ETF has increased by 16% this year, while the VanEck Semiconductor ETF (SMH), which includes leading AI companies like Nvidia, Taiwan Semiconductor, and Broadcom, has surged by 42% as of the latest market close. Although both ETFs have seen declines this month, the infrastructure ETF is outperforming its semiconductor counterpart. The top holdings in Global X's infrastructure ETF include Howmet Aerospace, Quanta Services, and Parker Hannifin. O'Connor also highlighted the importance of electrification in supporting the AI boom, noting that the U.S. Electrification ETF (ZAP), which his firm offers, provides investors with exposure to key players in this sector. This electrification ETF has seen an impressive rise of nearly 24% this year, performing slightly better than the VanEck Semiconductor ETF for the month.