3 Industrial Names That Will Benefit from Rising CapEx in 2026

Key Points

• Industrial spending is broadening from roads and bridges into grid upgrades, reshoring, and data center buildouts—creating multi-year revenue visibility.
• Emerson’s automation portfolio and fiscal 2026 profit outlook position it for steady, contract-driven earnings growth.
• Fluor’s predominantly reimbursable backlog and Johnson Controls’ record pipeline and data center cooling push reinforce the “long-duration CapEx” theme.

Industrial stocks were one of the best-performing asset classes in 2025. The Vanguard Industrials ETF NYSEARCA: VIS, a fund that tracks the broader sector, was up over 21% for the year, outpacing the S&P 500 Index, which returned around 16%.

A key reason industrials could extend their strength in 2026 is sustained capital expenditure (CapEx) spending.

Since the Infrastructure Investment and Jobs Act became law in November 2021, investors have increasingly recognized that “infrastructure” includes not only roads and bridges, but also grid resilience, broadband, water systems, and other multi-year programs that keep industrial demand elevated.

And all of this continues as the United States invests in alternative energy forms, such as liquefied natural gas (LNG), hydrogen, and, more recently, nuclear energy.

CapEx Spending Is Becoming More Systemic Than Cyclical

Investors understand that, in many cases, CapEx spending is cyclical. The problem is that sometimes those cycles can get interrupted, which can delay—or stop—spending.

This time around, though, the spending is systemic in nature. That's because it’s backed by long-term catalysts such as regulatory mandates, national security priorities, and long-dated “sticky” contracts with utility companies, governments, and hyperscalers.

For investors, this becomes an earnings story. Instead of thinking about the companies behind these projects on a quarter-by-quarter basis, investors have a line of sight for revenue and earnings that spans several years. And this spending will happen no matter what happens in the broader economy in the next few years.

Providing Automation for Critical Infrastructure

Emerson Electric Co. NYSE: EMR is a blue-chip name in the industrials sector. EMR stock was up about 18% in 2025, outperforming the S&P 500. However, that was below the stock’s 10-year total return of around 306%, an average of around 30% per year.

The company manufactures control systems, software, and instrumentation that generate sticky revenue that is deeply embedded in their company’s operations.

Emerson closed out its 2025 fiscal year in November and forecasted a strong 2026 fiscal year with earnings per share growth (EPS) of around 8%. However, EMR stock is currently trading near the consensus price target of around $150.

Investors will get their next look at the company’s earnings in early February. That could raise the earnings outlook and cause analysts to raise their price targets on EMR stock.

Even if the stock takes longer to take the next leg higher, investors are paid to hold the stock with this dividend king that has increased its payout per share for 68 consecutive years.

A Builder of Mega-Projects

Fluor Corp. NYSE: FLR specializes in large-scale energy, infrastructure, and government projects. This could be a headwind in the short term as revenue and earnings may have tough year-over-year (YOY) comparisons in the first half of the year. However, that’s expected to reverse in the back half of the year with analysts forecasting 16.4% earnings growth for the year.

The company has narrowed and focused its global priorities around energy security, reshoring, and infrastructure renewal. In fact, the company was an early investor in NuScale Power NYSE: SMR, which is pioneering small, modular nuclear reactors.

The company has also pivoted to reimbursable projects that expand the company’s addressable market and has created a $28.2 million backlog that acts as a built-in revenue pipeline.

Analysts give FLR stock a $49.37 price target, which is about 12% higher than its closing price on Jan. 7.

However, analysts have been raising their price targets since the company last reported earnings in November.

Smart Buildings and Energy Systems

Johnson Controls International Inc. NYSE: JCI was one of the strongest performers in the sector with a gain of over 40% in 2025. Analysts are raising their price targets for JCI stock, which is supported by expectations of strong revenue and earnings growth in 2026.

The reason for the optimism is that Johnson Controls develops products and services that are essential for the modernization of commercial buildings, data centers, and public infrastructure.

In fact, the company has recently launched its Coolant Distribution Unit (CDU), which is essential for the liquid cooling systems that are needed with high-density AI servers.

Johnson Controls helps its customers reduce their operating costs and meet sustainability mandates that span several years, which leads to strong recurring service and software revenue. Right now, the company has a backlog of over $16 billion.