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Earnings & Growth Outlook

The AI Infrastructure Portfolio continues to exhibit strong earnings momentum, supported by record global investment in AI data centers, semiconductor innovation, and memory demand. Across the portfolio, earnings growth is projected to outpace the broader market well into 2026, driven by sustained capital expenditures from hyperscalers and enterprise adoption of generative AI.

Key Earnings Themes by Sector:

Semiconductors & Foundries (NVDA, AVGO, TSM, ASML)
These core holdings remain the earnings engine of the portfolio.

  • NVIDIA (NVDA) is expected to deliver another year of double-digit revenue and earnings growth, powered by the launch of its Blackwell GPUs and expanded AI software ecosystem.
  • Broadcom (AVGO) continues to grow earnings steadily, leveraging custom AI accelerator contracts and high-margin networking chips.
  • TSMC (TSM) projects strong multi-year revenue expansion as demand for advanced nodes (3nm and 2nm) and AI-specific packaging (CoWoS, SoIC) accelerates.
  • ASML (ASML) maintains a robust order backlog, with revenue expected to rise 20–25% annually as EUV systems become standard for AI-capable chip production.

Memory & Storage (MU)

  • Micron (MU) remains the fastest-growing earnings story in the group, with analysts projecting a sharp rebound in profitability through 2026 as HBM adoption expands. The company is positioned for record operating margins as AI-driven DRAM and NAND demand continues to tighten supply.

Networking & Systems (ANET, SMCI)

  • Arista Networks (ANET) expects steady double-digit earnings growth as 800G and 1.6T Ethernet adoption accelerate among hyperscalers.
  • Super Micro Computer (SMCI) is forecasting strong top-line growth, though margins may normalize after its record 2024–2025 surge. Continued AI rack demand provides a firm revenue floor.

Power & Cooling Infrastructure (VRT, ETN)

  • Vertiv (VRT) continues to raise guidance, citing growing demand for liquid cooling and higher data center density. EPS growth projections exceed 40% year-over-year.
  • Eaton (ETN) expects mid-teens earnings growth as AI-related electrical and grid modernization projects become a larger share of revenue.

Aggregate Outlook:

  • Expected Portfolio EPS Growth (2025–2026): ~25–30% CAGR
  • S&P 500 EPS Growth (Est. 2025): ~8–10%

The portfolio’s earnings trajectory remains well above market averages, reflecting its focus on mission-critical components of the AI economy. While cyclical corrections are possible, the combination of structural demand, supply constraints, and technological leadership provides a clear path for continued earnings expansion through at least 2027.

Updated on Oct 17, 2025