Somewhere around 1910, a self-taught geologist named Patillo Higgins lost almost everything betting on oil near Beaumont, Texas. The locals thought he was nothing more than a crank using shoddy drilling equipment to extract oil on marshy lands. Respectable investors, though, wanted nothing to do with Spindletop Hill.
But that was before Lucas Gusher blew…
On the morning of Jan. 10, 1901, crude erupted 150 feet into the sky and kept flowing at 100,000 barrels a day… roughly as much as the rest of the entire U.S. oil industry combined.
Within months, the population of Beaumont quintupled. Pipelines, refineries, and railroad depots sprang up seemingly overnight. The smart money chased every single company and industry that would be needed to move, store, refine, and deploy all that oil.
Fast-forward to this week’s earnings, where the Magnificent Seven put up high-flying numbers that would make the Lucas Gusher blush.
The Mag 7 Earnings Deluge
Microsoft (MSFT), Google (GOOGL), Amazon (AMZN), and Meta (META) collectively committed to spending $725 billion on AI infrastructure in 2026 alone. Three of the four boosted their capital expenditure guidance.
Amazon, the biggest spender of the bunch at $200 billion, maintained its already jaw-dropping commitment. And perhaps most telling of all: none of them so much as hinted at a peak.
Google said 2027 capex would rise significantly over 2026 levels. Amazon pledged to double data center power capacity by the end of 2027. Microsoft implied the company consistently underestimates its own compute needs. Meta echoed the same posture. Every signal pointed the same direction… up.
Those are the kind of numbers that rewrite supply chains. Because every dollar of hyperscaler capex flows downstream like crude from a gusher.
It hits the chip makers…
It hits the construction equipment companies…
Caterpillar (CAT) reported fantastic numbers this week, and why wouldn’t it? You can’t build a data center without heavy machinery. Nvidia (NVDA), Taiwan Semiconductor (TSM), Micron (MU), Seagate (STX), Corning (GLW), Teradyne (TER), KLA Corp (KLAC), and WESCO International (WCC) all sit on the receiving end of that spending river.
The memory stocks deserve special attention.
Micron, SanDisk, Seagate, and Western Digital (WDC) still trade at single-digit or low-double-digit forward price-to-earnings multiples despite sitting squarely in the middle of a massive demand cycle. These aren’t names that have peaked.
Fundamentally, there remains considerable room for both earnings expansion and multiple expansion. SanDisk just launched a two-terabyte memory card retailing for $2,000. That tells you something about where the demand curve is heading.
Stocks to Buy After Earnings
For investors wondering where the next leg of this trade broadens, keep an eye on the industrial complex. Names like Caterpillar, WESCO, Deere (DE), Comfort Systems USA (FIX), and Dycom Industries (DY) are positioned to benefit as AI infrastructure buildout translates into real-world demand for equipment, energy, labor, and land.
These companies still offer discounted valuations relative to the pure semiconductor names (many of which have already sprinted to rich multiples).
Then there’s Qualcomm (QCOM)…
Over the past two years, the AI boom has systematically “reawakened” chip stocks that the market had left for dead. Nvidia was first. Then AMD. Then Intel (INTC), which rallied from the mid-teens to $90-plus in a matter of months. Now Qualcomm announced a new custom silicon business that has already secured a major contract with one of the world’s largest hyperscalers, with shipments expected by year-end.
QCOM stock hasn’t sprinted… yet. But it could follow the Intel pathway over the coming months, which suggests substantial upside from current levels.
Meanwhile, the other side of the economy keeps deteriorating. The Federal Reserve remains locked in a stalemate; a tug-of-war between incoming chair Kevin Warsh and departing chair Jerome Powell is all but guaranteeing that rates stay frozen.
The 10-year Treasury hovering around 4.5%, mortgages elevated, auto loans pinching consumers, credit card balances growing.
Iran’s nuclear standoff keeps oil above $100 per barrel with no resolution in sight.
Wage growth is running below inflation, creating negative real income growth.
The bifurcation is real, and it just got cemented. AI infrastructure is on fire. Everything else is limping.
That’s why Microsoft looks compelling here.
How to Proceed in This ÃÛÌÒ´«Ã½
A year ago, the market declared Google dead; GOOGL has since rallied 150%. Today, the same narrative is circling Microsoft and its OpenAI partnership. But GPT 5.5 just topped the benchmarks across the board.
OpenAI has $122 billion in fresh funding. And Microsoft remains the primary vehicle for that rebound.
Stop trying to bottom-fish Nike (NKE), Chipotle (CMG), and Disney (DIS). The macro backdrop isn’t built for those recoveries right now.
Ride the momentum where it lives: semiconductors, memory, industrials, and the broadening AI supply chain that’s only getting stronger.
The gusher is still flowing. The question is whether you’re positioned to catch it.
Watch this week’s episode of Being Exponential With Luke Lango to get the full scoop:
