Equipment Companies Will Collect While Hyperscalers Borrow

Cain Lee 9.13K Followers Follow Summary The Pacer US Large Cap Cash Cows Growth Leaders ETF (COWG) offers targeted exposure to companies with strong free cash flow margins amid elevated AI-driven capex cycles. I anticipate COWG may outperform QQQ and SPY over the next twelve months, especially if the AI market experiences a pullback. COWG's strategy screens the Russell 1000 for top free cash flow margin companies and applies a momentum overlay, resulting in a 33.59% free cash flow margin and 28.24x P/E. Risks include COWG's high expense ratio, sensitivity to technology sector downturns, and potential missed upside if mega-caps are rewarded for earnings growth despite negative free cash flows. Zolak/iStock via Getty Images Overview Most investors are already aware of the elevated CapEx spending levels that are going towards the buildout of AI infrastructure. I recently shared some thoughts on where the next $1.3 trillion of CapEx spending This article was written by Cain Lee 9.13K Followers Follow Financial analyst by day and a seasoned investor by passion, I've been involved in the world of investing for over 15 years and honed my skills in analyzing lucrative opportunities within the market.I specialize in uncovering high quality dividend stocks and other assets that offer potential for long term-growth that pack a serious punch for bill-paying potential. I use myself as an example that with a solid base of classic dividend growth stocks, sprinkling in some Business Development Companies, REITs, and Closed End Funds can be a highly efficient way to boost your investment income while still capturing a total return that follows traditional index funds. I created a hybrid system between growth and income and manage to still capture a total return that is on par with the S&P. Analyst’s Disclosure: I/we have a beneficial long position in the shares of COWG, VFLO, SMH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.