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Welcome to Episode #496 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, is joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey was joined by Zacks Chief Equity Strategist, John Blank, to talk about their favorite topic which is the state of the U.S. economy.
Will there be a recession in 2026?
Weak Job Market: Cause for Concern?
The job market appears to be weakening as new jobs created went negative for the first time this year with a loss of 23,000 jobs in July. The two prior months were also revised lower from prior readings.
Despite a trillion dollars in AI spending, in addition to robust federal government spending in areas like defense and agriculture, the US economy is not booming.
The Federal Reserve doesn’t seem concerned. It remained on the sidelines, with no revisions to interest rates, either cuts or increases, at its July meeting. It’s next meeting is Sep 15-16, 2026.
Stocks at New Highs
Meanwhile, the stock market doesn’t seem concerned either. The S&P 500 and Russell 2000 are hitting new all-time highs this month.
AI Revolution spending is trickling down to the old economy infrastructure companies that are involved in the data center buildout. You can find these stocks by looking at a list of Zacks Rank #1 (Strong Buy) stocks and seeing who has earnings that are taking off.
Tracey found three of them on a quick look at the list of #1s.
These aren’t who you think. They aren’t NVIDIA or Micron. These companies are further down the chain but revenue and earnings are popping as the hyperscalers plan on spending $1 trillion on the AI buildout this year.
3 AI Revolution Strong Buy Stocks for Your Short List
Arrow Electronics is a technology solutions distributor for manufacturers and service providers. On Aug 6, 2026, Arrow Electronics reported its results for the second quarter 2026. Sales jumped 32% to $9.9 billion and it saw healthy demand across all regions, end markets, and customer segments.
Shares of Arrow jumped 90% year-to-date. Earnings are expected to rise 85.5% in 2026 so the stock remains cheap. Arrow Electronics has a price-to-earnings (P/E) ratio of just 10.3. A P/E ratio of 10 is considered a deep value stock.
Arrow was added to the Zacks Rank #1 (Strong Buy) list on Aug 11, 2026.
Should a technology distributor like Arrow be on your short list?
MKS provides foundational technology solutions to semiconductor manufacturing, electronics and packaging, and specialty industrial applications. On Aug 5, 2026, MKS reported second quarter 2026 results and saw revenue above the high end of the company’s guidance. It also saw rapidly growing order volume due to AI.
Shares of MKS are up 92% year-to-date. Earnings are expected to jump 64.5% in 2026. Yet it’s still attractively priced with a forward P/E of 23.7.
MKS Inc. was added to the Zacks Rank #1 (Strong Buy) list on Aug 11, 2026.
Should a solutions provider to the semiconductor industry like MKS Inc. be on your short list?
SOLV Energy is another AI infrastructure play. It is a provider of infrastructure services to the power industry, including engineering, construction, testing, operations, maintenance, and repowering. Since 2008, it has built more than 500 power plants but also provides operations and maintenance (O&M) to 152 power plants.
On Aug 13, 2026, SOLV Energy reported second quarter 2026 earnings and saw record revenue. It’s backlog jumped 44% year-over-year to a record $8.9 billion. The company raised full year 2026 revenue guidance.
SOLV Energy went public in Feb 2026. Shares are up 7.2% since the IPO.
SOLV Energy was added to the Zacks #1 Rank list on Aug 11, 2026.
Should a power infrastructure company like SOLV Energy be on your short list?
What Else Should You Know About the Economy and Stocks Right Now?
View the Zacks #1 Rank List
Image: Bigstock
Will There be a U.S. Recession in 2026?
Key Takeaways
Welcome to Episode #496 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, is joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey was joined by Zacks Chief Equity Strategist, John Blank, to talk about their favorite topic which is the state of the U.S. economy.
Will there be a recession in 2026?
Weak Job Market: Cause for Concern?
The job market appears to be weakening as new jobs created went negative for the first time this year with a loss of 23,000 jobs in July. The two prior months were also revised lower from prior readings.
Despite a trillion dollars in AI spending, in addition to robust federal government spending in areas like defense and agriculture, the US economy is not booming.
The Federal Reserve doesn’t seem concerned. It remained on the sidelines, with no revisions to interest rates, either cuts or increases, at its July meeting. It’s next meeting is Sep 15-16, 2026.
Stocks at New Highs
Meanwhile, the stock market doesn’t seem concerned either. The S&P 500 and Russell 2000 are hitting new all-time highs this month.
AI Revolution spending is trickling down to the old economy infrastructure companies that are involved in the data center buildout. You can find these stocks by looking at a list of Zacks Rank #1 (Strong Buy) stocks and seeing who has earnings that are taking off.
Tracey found three of them on a quick look at the list of #1s.
These aren’t who you think. They aren’t NVIDIA or Micron. These companies are further down the chain but revenue and earnings are popping as the hyperscalers plan on spending $1 trillion on the AI buildout this year.
3 AI Revolution Strong Buy Stocks for Your Short List
1. Arrow Electronics, Inc. (ARW - Free Report)
Arrow Electronics is a technology solutions distributor for manufacturers and service providers. On Aug 6, 2026, Arrow Electronics reported its results for the second quarter 2026. Sales jumped 32% to $9.9 billion and it saw healthy demand across all regions, end markets, and customer segments.
Shares of Arrow jumped 90% year-to-date. Earnings are expected to rise 85.5% in 2026 so the stock remains cheap. Arrow Electronics has a price-to-earnings (P/E) ratio of just 10.3. A P/E ratio of 10 is considered a deep value stock.
Arrow was added to the Zacks Rank #1 (Strong Buy) list on Aug 11, 2026.
Should a technology distributor like Arrow be on your short list?
2. MKS Inc. (MKSI - Free Report)
MKS provides foundational technology solutions to semiconductor manufacturing, electronics and packaging, and specialty industrial applications. On Aug 5, 2026, MKS reported second quarter 2026 results and saw revenue above the high end of the company’s guidance. It also saw rapidly growing order volume due to AI.
Shares of MKS are up 92% year-to-date. Earnings are expected to jump 64.5% in 2026. Yet it’s still attractively priced with a forward P/E of 23.7.
MKS Inc. was added to the Zacks Rank #1 (Strong Buy) list on Aug 11, 2026.
Should a solutions provider to the semiconductor industry like MKS Inc. be on your short list?
3. SOLV Energy, Inc. (MWH - Free Report)
SOLV Energy is another AI infrastructure play. It is a provider of infrastructure services to the power industry, including engineering, construction, testing, operations, maintenance, and repowering. Since 2008, it has built more than 500 power plants but also provides operations and maintenance (O&M) to 152 power plants.
On Aug 13, 2026, SOLV Energy reported second quarter 2026 earnings and saw record revenue. It’s backlog jumped 44% year-over-year to a record $8.9 billion. The company raised full year 2026 revenue guidance.
SOLV Energy went public in Feb 2026. Shares are up 7.2% since the IPO.
SOLV Energy was added to the Zacks #1 Rank list on Aug 11, 2026.
Should a power infrastructure company like SOLV Energy be on your short list?
What Else Should You Know About the Economy and Stocks Right Now?
Tune into this week’s podcast to find out.