The "Grid" Bottleneck: AI vs. Utilities

**SPEAKER_1** (0:30)
Here's your Invest Talk Manager, Luke Guerrero.

**Luke Guerrero** (0:34)
Good afternoon, fellow investors, and welcome back to another episode of Invest Talk. I'm Luke Guerrero, and today's Friday, February 6th, 2026 Just another Friday for us here at Invest Talk. We got another great show playing for you today. We'll be answering plenty of your questions, talking about the stories that matter, and trying to fulfill that mission each and every day to help make you a better and more informed investor. Now, before we talk about the market performance, and it was certainly a reversal of a day from the past couple of days, before we run down those show topics, this show is about your questions primarily. It's about what's on your mind. So let's tackle this caller question now.

**SPEAKER_3** (1:19)
Yes, this is Dave from Bryant, California. I was calling about XLI.
I own it, and I was thinking with the way the economy is turning, it might be time to cash in.

**SPEAKER_4** (1:35)
Thank you.

**Luke Guerrero** (1:36)
Ticker XLI is the State Street Industrial Select Sector SPDR ETF. What it does is it tries to get you industrial exposure by selecting from the S&P 500 and thereby limiting most of its, or rather some of its small and mid cap exposure. If you look at the market cap percentage in this fund, 0% in small caps, 1.19% in mid caps, and then 98.76% in large caps, it's going to give you your aerospace and defense manufacturing, your machinery manufacturing, your delivery and logistics services, anything that is within that S&P 500 with that classification industrials. Now, over the past year, it's up 24.46%. It's actually been doing really well year to date, up 8.54%.
So the question is, all right, if the economy is turning, which I would content, you know, the market's not the economy, right? Market has never been the economy. The real economy and the financial economy, a bit different. So even if the economy is starting to turn, you're not really seeing signs of a breakdown in industrials and certainly not seeing a sign of a breakdown in this ETF. A lot of what has happened in the market this week, and certainly there was a big reversal. The S&P finished flat for the week. A lot of what's happened this week has been centered around the narrative of AI, AI spending, and really the lack of monetization across the board and hasn't really spilled over into other sectors. So unless you're overweight, a ridiculous amount relative to what the market weight is of industrials, I don't see any reason why you would want to fully exit this industrials ETF. That is XLI, the State Street Industrial Select Sector Spider ETF. Thanks for the call. Got a lot of ground to cover in the next 45 minutes or so, and it all starts with our main focus point, which concerns this story, the grid bottleneck, AI versus utilities. We've all seen how tech earnings calls have really highlighted a new risk. There isn't enough electricity to power the new data centers. We'll talk about the utility super cycle as power companies raise rates to build this new capacity.
We'll also touch on a story I saw today about KPMG pressing its auditors to cut costs, or rather to cut the price they charge KPMG due to AI cost savings. What does that mean for the audit industry and really industry as a whole? Stock market obviously looking a bit shaky, so we'll talk about the pieces of the market that really have weathered the storm that we saw this week in terms of volatility. And the Dow Jones Industrial crossed 50,000 for the first time. We'll talk about the journey should we have time at the end of the show. We also have got some voice bank calls ready to play, including one on RBRK, which is Rubrik, Inc., and another about Preferred Stocks. As always, we'll answer questions from the Invest Talk YouTube channel comment section and hopefully we'll hear from some of you live throughout the show. Well, it's Friday and we still have things to look into before we wrap up the day. But now we're going into a break. Please remember you can call anytime and leave your questions on the Invest Talk voice bank. If you're listening to your live stream or possibly on AM 1220 in the Bay Area, give me a call now at 888-99-CHART. When we get back, we'll talk about today's market activity.

**SPEAKER_5** (5:13)
When you tell your friends about Invest Talk and they ask you why you listen, let them know there are many reasons and one is parallel investing. From KPP Financial and Invest Talk host Justin Klein. Parallel investing means Justin invests right alongside KPP Financial clients. He makes the same trade for KPP Financial on the same day at the same price and the same percentages as KPP clients. There's no front running and no special treatment. In this way, Justin and KPP Financial share the same risks and the same potential for success. Parallel investing aligns the interests of Justin and KPP Financial with those of his clients. Justin Klein and Luke Guerrero are ready to answer your questions about parallel investing. And you can learn more anytime at investtalk.com.