Beyond AI: Three Infrastructure Stocks Poised for Growth in 2025 and Beyond
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Investing in infrastructure is no longer solely about the companies powering artificial intelligence. While AI’s demand for semiconductors and data center infrastructure is undeniable, a broader range of sectors – from industrial to energy and aerospace – are poised for meaningful investment and growth throughout the decade, particularly with a focus on onshore American manufacturing.
Investors seeking to capitalize on this trend should look beyond the obvious and consider companies strategically positioned to benefit from these evolving dynamics. Here are three infrastructure stocks that analysts believe offer compelling opportunities.
Baker Hughes: Bridging Energy and the Future of Warfare
Shares of baker Hughes (NASDAQ: BKR) have risen over 26% in the last year, fueled by strong demand from integrated oil companies maintaining high production levels. however,the company’s potential extends far beyond traditional energy services. Baker hughes is rapidly becoming a key player in digital automation and drone warfare technologies.
With the Pentagon planning a budget exceeding $900 billion to modernize the military – prioritizing unmanned systems, energy resilience, and digital warfare – Baker Hughes’ expertise positions it as a natural partner. While the company currently lacks substantial defense contracts, orders for digitally enabled solutions and automation platforms are steadily increasing, signaling a growing relevance in this critical sector.
“As the economy expands, Baker Hughes may see growth in multiple business units, which may not be fully priced into the stock,” one analyst noted. Currently trading at 14.6x earnings – a slight premium compared to the energy sector – this price could be justified if the company successfully establishes itself in the digital infrastructure space.
GE Aerospace: Soaring on Commercial and Defense Demand
GE Aerospace (NYSE: GE) represents a pure-play investment in the aerospace sector, operating through two core units: Commercial engines and Services, and Defense and Propulsion Technologies. Demand is surging in both the public and private sectors, driving growth for the company.
A potential concern for investors is the typically lower margins associated with defense contracts. At a current valuation of 37x earnings – a premium to the sector – this is a valid consideration,especially given the stock’s 13% premium above its consensus price target. However, this premium may be warranted if defense demand remains strong and analysts continue to revise their projections upward.
Indeed, analysts are increasingly optimistic. UBS Group recently increased its price target for GE Aerospace from $300 to $321, representing a potential gain of approximately 19% from its August 25th price. This upward momentum suggests continued confidence in the company’s growth trajectory.
Caterpillar: A Dividend Aristocrat Built for the Long Term
Caterpillar (NYSE: CAT) stock has increased by 19.2% in 2025, though this growth is somewhat below the returns seen in the past five to ten years. Despite this,the company remains a “must-own” stock for investors focused on best-in-class companies,even at a slight premium.
While tariff-related expenses have impacted Caterpillar’s bottom line in recent quarters, the company is demonstrating resilience. Growth in its Energy and Transportation unit – providing engines, turbines, and locomotives for power generation – is offsetting these challenges and supporting the expanding digital economy.
Caterpillar’s status as a Dividend Aristocrat, with 30 consecutive years of payout increases, further enhances its appeal. Its current payout ratio of around 30% ensures the $6.04 per share dividend is secure.
these three companies represent a diverse range of opportunities within the broader infrastructure landscape, offering investors exposure to key growth areas beyond the immediate focus on AI.
