While AI stocks experienced a selloff, three non-AI companies present attractive long-term investment opportunities: Cummins (CMI), a historic engine manufacturer benefiting from data center demand and trading 29% below summer highs; Argenx (ARGX), a biotech firm with its blockbuster autoimmune drug Vyvgart expanding to new indications; and PACCAR (PCAR), a truck manufacturer positioned to benefit from fleet refreshes and constrained freight capacity.

Generac Holdings maintains its $350 million 2026 free cash flow forecast while increasing capital spending to 4.5% of sales to expand production capacity for its booming data center business. The company has secured $1.6 billion in data center backlog and two multi-year supply agreements, with capital investments expected to pay back in under 12 months. Competitors Caterpillar and Cummins are also benefiting from strong data center power demand.

Cummins (CMI) has returned 1.4% year-to-date, significantly outperforming the Auto-Tires-Trucks sector average decline of 12.9%. With a Zacks Rank #2 (Buy) and a 2.7% increase in consensus earnings estimates over the past quarter, CMI shows stronger earnings outlook. Fox Factory Holding (FOXF) also outperformed with 8.8% returns and a Zacks Rank #1 (Strong Buy), though it operates in a weaker-performing industry.

Generac Holdings (GNRC) reported 29% C&I sales growth driven by data center demand, securing $700M in multiyear hyperscale supply deals and projecting $450M in 2026 data center revenues. However, tariff volatility, unfavorable product mix, and lower C&I margins pose risks to profitability. Competitors Caterpillar and Cummins are also capitalizing on strong data center power demand.

Cummins Inc. (CMI) is featured as a stock to watch with a #3 (Hold) Zacks Rank and an A-rated VGM Score. The company demonstrates strong growth potential with a Growth Style Score of A and forecasted year-over-year earnings growth of 25.2% for the current fiscal year. Four analysts revised earnings estimates upward in the last 60 days, with the consensus estimate increasing to $29.78 per share.

Generac Holdings has secured a major long-term supply agreement with Amazon to provide backup power generators for data centers, with initial deliveries totaling $2.4 billion expected in 2027-2028. The deal includes warrant provisions extending up to $8 billion in qualifying payments. Generac's data center backlog reached $1.6 billion as of July 2026, positioning the company to capitalize on accelerating AI and cloud computing infrastructure demand.

The global microgrids market is projected to reach $79.7 billion by 2033, driven by industrial electrification, grid reliability concerns, and rising adoption among data centers and healthcare facilities. The market is transitioning from hardware-focused to software-and-services driven, with control platforms and energy-as-a-service models capturing disproportionate value. Early movers securing interconnection rights and long-tenor contracts are establishing competitive advantages, while pure equipment vendors face structural margin compression.

While mega-cap tech stocks have dominated AI investment, industrial companies providing essential infrastructure for data centers are quietly benefiting. Eaton Corporation, Vertiv Holdings, and Cummins are positioned as 'picks-and-shovels' winners, offering exposure to AI growth through power distribution, cooling solutions, and backup generation systems, with attractive valuations compared to traditional tech stocks.

As hyperscalers like Alphabet, Amazon, Meta, Microsoft, and Oracle collectively spend approximately $750 billion on AI infrastructure in 2026, Cummins is capitalizing on the massive demand for backup power systems. The company's Power Systems segment saw 19% year-over-year sales growth driven by data center demand, with AI racks consuming up to 600 kilowatts compared to traditional 12-kilowatt racks. Cummins is expanding beyond emergency backup to provide primary power solutions through microgrids, positioning itself as a key beneficiary of the AI infrastructure boom.

Garrett Motion announced the appointment of Dave Crompton, Executive Chair and Co-Founder of Pioneer Clean Fleet Solutions and former President and CEO of Achates Power, to its Board of Directors. Crompton brings over 40 years of leadership experience in commercial transportation, industrial, and power generation, including 28 years at Cummins Inc. The appointment is expected to support Garrett's strategy to expand beyond automotive into industrial applications.

Generac Holdings has strategically pivoted from residential backup generators to become a critical infrastructure supplier for AI data centers. The company secured a landmark global supply agreement with an undisclosed hyperscaler (likely connected to the Stargate AI project) and reported strong Q1 2026 results with 12% YoY revenue growth and 35% EPS beat. However, the stock trades at a premium 87x P/E ratio with no insider buying activity and recent CEO stock sales, presenting valuation risks despite compelling growth prospects.

Cummins is leveraging strong demand for backup power generators in AI data centers to diversify beyond its traditional truck engine business. The company's power systems segment grew 19% year-over-year with record EBITDA margins of 29.5%, offsetting weakness in the North American truck market. Management raised 2030 revenue targets to $45-50 billion with EBITDA margins above 20%, supported by a backlog extending into 2028.