TRUSTED SOURCE — Alpine Macro: Buy Electrical Equipment
From The Heat Map · 9:03
Show by Eric
Alpine Macro's equity strategy team (Nick Giorgi, Chief Equity Strategist) published "There Will Be Data…Centers: Buy Electrical Equipment" on November 10, 2026, initiating a tactical long on the S&P 500 Electrical Equipment industry: GEV, ETN, EMR, VRT, BE, AME, ROK, HUBB, GNRC. Their thesis: power is the "final boss" bottleneck for data centers and the broader economy, and a multi-month shakeout with capitulation around the U.S. midterms has put the industry on sale. The setup: stocks on average 26% off their 52-week highs; the earnings multiple compressed 27% since the June 22 peak (29% vs 12% for the S&P 500 since April) even as forward earnings rose 5.5% and every member saw positive EPS revisions; a 14-day RSI of 35. The demand evidence: Eaton's Electrical Americas backlog rose 33% in Q3 with its negotiations pipeline up 55%; GE Vernova is selling gas turbine slots for 2032 delivery, with gas prices booked this year about 50% higher than last year; Eaton's Electrical Americas margins touched 29.8%; Vertiv raised full-year adjusted operating margin guidance to 24%. The valuation case: consensus EPS compounding at about 22.2% a year through 2029 on roughly 10.7% sales growth; the industry at 26x earnings, a 1.2x PEG versus 1.8x for the S&P 500; a return to average multiples implies about 15% upside before any earnings growth. On regulation, Alpine reads the midterm ballot pushback (data center limits favored in 46 of 47 measures) as a delay, not a cancellation, and the BAAJA permitting bill — advanced in the Senate on November 9 — as an incremental positive. The named risk: a deep hyperscaler cap ex pullback, with cap ex guidance, token usage and compute rental costs as the monitors. Desk note: the call converges with our own grid read — ETN and GEV sit in our best-case holds, and VRT was on our quality-on-sale list at −17.5% off its October 28 anchor. For informational purposes only. This is not financial advice. Please do your own research.
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