An AI 'pick-and-shovel' play and signs that the market rally is broadening

CNBC

14-08-2025

(This is a wrap-up of the key money moving discussions on CNBC's "Worldwide Exchange" exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Traders looked at signs of the market rally broadening outside of the megacap tech names. Plus, a new way of playing artificial intelligence. Worldwide Exchange Pick: Aecom Kevin Mahn of Hennion & Walsh sees Aecom as a "picks and shovel" play for the AI trade. "I always follow the adage of 'follow the money' we continue to see companies announcing tens of billions of dollars of investment into AI infrastructure," Mahn said. "Who are the companies that are going to benefit from all that spending? Aecom is one of them. They are the infrastructure partners for the upcoming 2028 Olympics in Los Angeles. They also provide engineering, consulting and construction services to data centers." Aecom is outperforming the S & P 500 and Nasdaq-100 year to date. Opportunities in municipal bonds Mahn said municipal bonds are primed for a breakout after a rush of issuance ahead of the Trump tax and spending bill on concerns they would tax exempt provisions could be taken away. "Municipal bonds have struggled year to date on a price basis," Mahn said about the price action due to elevated issuance. "What we see over the remainder of the year is less issuance. Any time you have an asset class where you have less supply increasing or similar demand, prices are going to go higher." Plus if you are a high net income investor, tax free income is always attractive," Mahn added. Broadening market As the S & P 500 and Nasdaq hit fresh records again on Wednesday, there is a simultaneous broadening and a move into more volatile parts of the market by investors. This week, the Invesco S & P 500 Equal Weight ETF (RSP) is outperforming the market cap weighted S & P 500. "All the evidence of froth is clearly there," said Gina Sanchez of Chantico Global. "I think the market's broadening out is a good sign because it's been such a tiny segment of the market has been driving most of the returns all year which makes the market somewhat fragile." Sanchez added: "I see a lot of downside for the markets but the momentum is continuing, the problem with momentum and sentiment is that it can turn and shift at any moment."