Core Insights - Industrial stocks demonstrated strong performance in 2025, with the Vanguard Industrials ETF increasing over 21%, surpassing the S&P 500's return of around 16% [3] - Sustained capital expenditure (CapEx) spending is expected to support the industrial sector's growth into 2026, driven by long-term infrastructure investments [3][5] - The Infrastructure Investment and Jobs Act has broadened the definition of infrastructure, leading to elevated industrial demand across various sectors [3] CapEx Trends - CapEx spending is shifting from cyclical to systemic, supported by regulatory mandates, national security priorities, and long-term contracts with utility companies and governments [5] - This systemic nature of spending provides investors with a clearer revenue and earnings outlook that extends over several years, regardless of broader economic conditions [5] Sector Developments - Industrial spending is expanding beyond traditional areas like roads and bridges to include grid upgrades, reshoring, and data center construction, enhancing revenue visibility [7] - Companies like Emerson Electric Co. are positioned for steady earnings growth due to their automation portfolios and favorable profit outlooks for fiscal 2026 [7] - Fluor and Johnson Controls are also reinforcing the long-duration CapEx theme with their project backlogs and pipelines [7][8]

Market Overview - The bull run in Wall Street that began in early 2023 faced challenges last month, primarily due to a significant rally in the technology sector driven by generative AI growth [1] - Market participants have experienced increased pain, with U.S. stock markets in negative territory year-to-date and the Nasdaq Composite in correction [2] - Key factors contributing to this downturn include overstretched valuations of AI stocks, recession fears in the U.S. economy, uncertainty regarding future interest rate cuts by the Fed, and competition from low-cost generative AI platforms from China [3] AI-Powered Non-Tech Stocks - Five non-tech companies utilizing extensive AI applications are recommended for investment: PayPal Holdings Inc. (PYPL), Visa Inc. (V), Upstart Holdings Inc. (UPST), Netflix Inc. (NFLX), and Johnson Controls International plc (JCI) [4][5] PayPal Holdings Inc. (PYPL) - PYPL is experiencing robust growth in total payment volume, with improved customer engagement and rising adoption rates across platforms [7] - The company leverages AI to enhance transaction efficiency and consumer insights, with platforms like Fastlane and Ads providing a technological edge [8] - Expected revenue and earnings growth rates for PYPL are 3.7% and 8% respectively, with a Zacks Consensus Estimate for earnings improving by 2.4% in the past 60 days [9] - PYPL's current valuation metrics indicate an attractive position compared to peers, with a forward P/E of 13.58X, P/S of 2.12X, and P/B of 3.30X [10] - The average price target suggests a potential increase of 36.2% from the last closing price of $68.62, indicating a maximum upside of 82.2% [11] Visa Inc. (V) - Visa's strategic acquisitions and alliances are driving long-term growth, with expected net revenue growth in low double-digits for fiscal 2025 [12] - The shift to digital payments and increased demand for AI-driven services, particularly in fraud prevention, are beneficial for Visa [13] - Visa has invested $3.5 billion over the past decade to enhance its data platform, preventing $40 billion in fraud attempts annually [14] - Expected revenue and earnings growth rates for Visa are 10.2% and 12.4% respectively, with a current dividend yield of 0.71% [15] - The average price target indicates a potential increase of 15.2% from the last closing price of $332.84, with a maximum upside of 23.2% [16] Upstart Holdings Inc. (UPST) - UPST operates as an AI lending platform, partnering with banks to provide affordable credit across various lending segments [17] - The company's AI-driven credit risk models allow for more approvals at lower APRs, enhancing efficiency and fraud detection [18] - Expected revenue and earnings growth rates for UPST are 59.3% and over 100% respectively, with earnings estimates improving significantly in the past 30 days [19] - The average price target suggests a potential increase of 61.5% from the last closing price of $49.66, indicating a maximum upside of 117.5% [21] Netflix Inc. (NFLX) - Netflix utilizes AI and machine learning to enhance user experience through personalized content recommendations [22] - The company reported strong engagement levels, with an average of two hours of viewing per member per day [22] - Expected revenue and earnings growth rates for Netflix are 14% and 24% respectively, with earnings estimates improving by 4% in the past 60 days [25] - The average price target indicates a potential increase of 20% from the last closing price of $919.68, suggesting a maximum upside of 62.4% [26] Johnson Controls International plc (JCI) - JCI is benefiting from strong demand in its Building Solutions segment, particularly in HVAC and security [27] - The company is investing in digital offerings, enhancing its AI capabilities through the OpenBlue platform [28] - Expected revenue and earnings growth rates for JCI are -11.9% and -1.9% respectively, with a current dividend yield of 1.92% [30] - The average price target suggests a potential increase of 23.4% from the last closing price of $78.68, indicating a maximum upside of 33.5% [31]

Core Viewpoint - Johnson Controls International plc has announced a quarterly dividend of $0.37 per share, reflecting its commitment to returning value to shareholders and maintaining a long history of consecutive dividend payments since 1887 [1]. Company Overview - Johnson Controls is a global leader in smart, healthy, and sustainable buildings, focusing on transforming environments for living, working, learning, and playing [2]. - The company has a legacy of nearly 140 years of innovation and offers a comprehensive digital solution called OpenBlue, which serves various industries including healthcare, education, data centers, airports, and manufacturing [3]. - Johnson Controls boasts the largest portfolio of building technology and software, along with service solutions from trusted industry names [3].