The buildout of Artificial Intelligence (AI) infrastructure is one of the largest industrial projects in history, with capital expenditures on data centers projected to exceed $1 trillion in 2027 alone.1 We believe this creates a long-term secular opportunity that extends beyond semiconductors and other computer hardware to the physical infrastructure these facilities require, including power generation, electrical equipment, and construction.

The First Trust RBA American Industrial Renaissance® ETF (AIRR) provides meaningful exposure to many of the small- and midcap US industrial stocks that are well-positioned to benefit from these trends, in our opinion. But while data center tailwinds have contributed to strong performance in recent years, the fund declined by 22.5% (6/30/26-9/30/26) amid a surge of volatility in the third quarter of 2026. Below, we assess some of the factors behind the pullback and why we believe the long-term case remains intact.

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