Capital Goods: We need to talk about industrial cycles & how they tend to turn

We are potentially observing one of the most concentrated capex cycles of our lifetimes. Industrial capex has doubled (on our definition) over the past 5 years, with 80%+ incremental spending related to AI infra build out. Yet this cycle started showing increasing signs of strain: 1) Physical construction/equipment bottlenecks (hyperscaler capex revisions stalled), 2) Rising funding costs & evidence of circular financing, 3) Signs of commoditisation, 4) Uncertainty around paybacks, 5) Increasing concerns around permitting following US mid terms. Despite all of that, at c20x PE'27 our Datacenter exposed industrials are not pricing a material risk of cycle plateauing (memory stocks do, at 3-5x PE'27). Hence we see an asymmetric risk if cycle indeed wobbles, and prefer exposure to defensive DC-exposed industrials (LR, SU, ALFA - all OW).