Company Interview / Global stocks with flying prospects

Key points:

Rotation underway from mega cap technology towards small and mid-cap stocksGrowth in US industrial production and non-tech earnings now rivals tech sectorAI-driven capital expenditure benefits suppliers across data centre infrastructureDefence and aerospace companies like Curtiss-Wright (NYSE:CW) remain resilient due to strong earnings visibility and limited AI disruption

Nick Markiewicz from Ellerston Capital outlines a pivotal moment emerging in global equity markets, identifying early signs of a shift from the dominance of mega cap technology companies—often referred to as the Magnificent Seven—towards opportunities in small and mid-cap stocks. Markiewicz points to the recent outperformance of the Russell 2000 versus the S&P 500 as evidence of changing market leadership, a trend supported by a recovery in US industrial indicators such as freight rates and industrial production. He highlights that investor sentiment is turning more constructive on “real economy” sectors, as earnings growth outside the tech giants is beginning to converge with those inside.

Markiewicz sees the rise of AI-related capital expenditure by large companies as a significant driver of new opportunities. He considers the “picks and shovels” segment—companies supplying data centres, GPUs, cooling equipment, and infrastructure—as attractive, since their prospects are linked to investment flows from the tech leaders rather than their competitive outcomes. Markiewicz singles out small and mid-cap industrial companies, as well as real asset businesses like waste management and aircraft leasing company AirCap (NYSE:AER), as offering solid growth with limited risk of AI disruption.

Defence remains a hot thematic, according to Markiewicz, who notes continued growth in global military spending. He cites Curtiss-Wright , involved in defence electronics, as a business with robust earnings visibility and minimal susceptibility to AI displacement. While valuations in the sector are no longer cheap, he views defence and aerospace as durable investment themes.