Investors Target Post-AI Growth Sectors
## Executive Summary
The market narrative, long dominated by a handful of AI-centric mega-cap stocks, is beginning to fracture. While bellwethers like **NVIDIA** have delivered extraordinary returns, sophisticated investors are now looking toward 2026 and beyond, seeking growth in the infrastructure that supports AI and in next-generation computational paradigms. This capital rotation is evidenced by a surge in grid technology, specialized data providers, and speculative quantum computing stocks, even as major financial institutions like **Goldman Sachs** signal a broader economic shift back to cyclical industries.
## The Event in Detail
Investor attention is expanding to small-cap and specialized technology firms poised to benefit from the second-order effects of the AI boom. Three distinct but related trends have emerged: a rally in AI-enabling infrastructure, bullish analyst calls on the nascent quantum computing sector, and a strategic pivot toward non-tech cyclical stocks.
First, the immense power and data requirements of AI are creating a secondary boom in infrastructure. Grid technology stocks have seen significant interest, with the **Nasdaq OMX Clean Edge Smart Grid Infrastructure Index** surging approximately 30% this year, outpacing the **Nasdaq 100**. This trend is not merely about speculation; it is rooted in fundamental needs. As noted by **JPMorgan** analyst Steve Tusa, "Any pullback is a buying opportunity at this stage," highlighting the sector's strong underpinnings. This is further exemplified by **Planet Labs (PL)**, an earth-imaging firm that was previously valued as a standard satellite operator. Following the disclosure of a 361% increase in its backlog to $672 million, driven by demand for its proprietary geospatial data for training AI models, its stock jumped 35%. The market has effectively repriced Planet Labs as "AI Infrastructure," trading at a premium 18x forward sales, a valuation typically reserved for software monopolies.
Second, Wall Street is beginning to position quantum computing as the next major technological wave. Mizuho analyst Vijay Rakesh, ranked 12th among Wall Street experts, recently initiated coverage on several quantum firms, stating, "We believe QC drives a new paradigm that offers exponential opportunities to 2035-40E as investors look for the next NVDA." The analyst highlighted three key players:
* **Rigetti Computing (RGTI):** A pure-play quantum firm that recently introduced its 84-qubit Ankaa-3 system with 99.5% fidelity and is targeting a 1,000+ qubit system by 2027.
* **IonQ (IONQ):** A pioneer in trapped-ion architecture that achieved its #AQ 64 milestone ahead of schedule and is expanding into quantum networking and sensing.
* **D-Wave Quantum (QBTS):** The first company to commercialize quantum computers, focusing on annealing systems to solve complex optimization problems, which recently secured a €10M system deal.
Rakesh projects the quantum computing total addressable market (TAM) could grow from ~$1 billion in 2025 to ~$205 billion by 2035.
## Market Implications
The pivot toward these new sectors reflects a market grappling with concentration risk and valuation concerns. The **Magnificent Seven** now account for nearly 35% of the S&P 500’s total market capitalization, and the AI trade is seen by some as crowded. The search for alpha is leading investors down the supply chain and into more speculative, long-term domains.
However, this tech-focused enthusiasm is not the only strategy gaining traction. Some analysts see the focus on AI and adjacent technologies as a distraction from a more traditional economic recovery.
## Expert Commentary
**Goldman Sachs** is presenting a counter-narrative, suggesting that the market has already priced in the majority of AI's upside. The firm is forecasting a significant economic growth rebound in 2026 that will benefit traditional cyclical sectors. In a recent note, its analysts stated that **Industrials, Materials, and Consumer Discretionary** businesses are positioned for the most significant gains.
> "Goldman’s analysts said that Industrials, Materials, and Consumer Discretionary businesses are in a position to see the most gains as economic activity picks up and tariff pressures ease."
Their forecasts are backed by specific data, projecting that earnings per share (EPS) growth in the Industrials sector could accelerate from 4% this year to 15% in 2026. This view is supported by recent market performance, where cyclical stocks have outperformed defensive names for 14 consecutive trading days—the longest such streak in over 15 years.
## Broader Context
The current market environment represents a critical crossroads. On one hand, the investment in grid technology and quantum computing signals a forward-looking belief in continued, multi-decade technological advancement. The rise of companies like Planet Labs highlights a new asset class: proprietary data for AI training, which carries a significant "temporal moat" that new capital cannot easily replicate. On the other hand, the high valuations, such as Planet Labs trading at 18x forward sales, introduce significant "perfection risk." A slowdown in converting its $672 million backlog to revenue could trigger sharp volatility. This bifurcation in strategy—betting on the next tech revolution versus a traditional economic recovery—will likely define market leadership through 2026.
