The Infrastructure Trade Nobody’s Talking About
What if the next infrastructure winners aren’t AI ones? Let’s grade stocks in an overlooked sub-sector.
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Everyone wants a piece of the companies that provide the infrastructure for our future. Not just AI infrastructure, but infrastructure in general.
What if there was an infrastructure sub-sector that has been overlooked? Not because it’s a new area of tech, but because it’s an under-the-radar choice.
I’m referring to bearings. Ball bearings are small metal spheres that allow machines to operate with efficiency, but that’s just one type of bearing.
A much wider variety of bearings can be found in manufacturing and automation. Bearings are used in everything from autos to aerospace, everywhere from hospitals to factories.
Investors are waking up to the potential for this class of product, particularly as it relates to the manufacture of EVs and robotics. Let’s dig deeper into this field to see which names offer the best opportunities.
Timken Co.
Timken (TKR) was incorporated in 1899 as the Timken Roller Bearing Axle Company. In 1901, Henry Timken moved the company from St. Louis to Canton, Ohio, to better service manufacturing hubs like Pittsburgh, Cleveland, and Detroit.
Timken is now the largest producer of bearings in the U.S. Looking back on the past 30 years of price activity on the monthly chart, Timken has provided steady but unspectacular gains for decades.
Then last year, Timken shares took off, gaining about 140% since April 2025.
Year-to-date, Timken has gained about 64%. According to TipRanks, there are six analysts with buy ratings on the stock, while three rate the stock a hold. The average price target among analysts is $147.33.
Zooming in on the daily chart, Timken is consolidating after posting strong gains (shaded area).
I’m looking to buy Timken on a pullback to its 50-day moving average (blue), currently located near $130.
GRADE: A-
RBC Bearings
Connecticut-based RBC Bearings (RBC) creates bearings for heavy industrial use. Customers include aerospace and defense providers, automakers, and manufacturers.
The stock’s recent decline has occurred on light volume (shaded yellow). We’re considering a small position in RBC Bearings after the company’s earnings report, which should occur on July 31.
GRADE: B+
Regal Rexnord
Regal Rexnord (RRX) is much more diversified compared to Timken and RBC, providing a wide variety of industrial products in addition to bearings. While diversification is sometimes desirable, in this case it can be considered a negative.
Earlier this week, Citigroup reiterated its buy rating on Regal Rexnord, and raised its price target to $260 from $240. However, a bearings pure play like Timken or RBC would be preferable in the current environment.
GRADE: B-
More From Ed Ponsi:
- We’re Adding This Under-the-Radar AI Infrastructure Play
- After a 100% Gain in 3 Months, We’re Trimming This AI Infrastructure Play
- Where Are Gold, Silver and Crude Oil Prices Headed Next?
At the time of publication, Ponsi had no positions in any securities mentioned.
