Tariffs get credit, but AI did the heavy lifting

The comeback everyone wants to claim

Manufacturing in the U.S. is having a very “look at me” moment. S&P Global’s flash PMI jumped to 55.3 in May, factory output sped up to its fastest pace in four years, and hiring hit an 11-month high. If you’re the White House, that’s a nice applause line for tariffs and reshoring.

But the tape is telling a different story

The rally in the manufacturing trade looks a lot less like old-school steel-and-smokestacks and a lot more like the AI arms race wearing a hard hat.

Just look at the winners:

• Caterpillar isn’t ripping because everyone suddenly wants more bulldozers; power generation is the hot seat.
• Vertiv is basically the plumbing crew for giant data centers.
• Coherent is moving the optical gear that helps AI chips talk to each other.
• Bloom Energy’s wild surge is tied to big power deals for data center campuses, not a fuel-cell revival.

That’s the sneaky part here: the industrial boom is real, but the customer base is mostly hyperscalers. AI data centers need power, cooling, networking, and backup systems now — not in three years after the grid finally gets around to it.

Why investors should care

Alphabet, Meta, Microsoft, and Amazon are throwing around capex budgets the way toddlers throw confetti. That spending has to land somewhere, and right now it’s landing on U.S. industrial supply chains. If that AI capex wave keeps rolling, manufacturers keep humming. If it cools off, a lot of this “tariff miracle” starts looking a lot more fragile.

Big picture: the manufacturing comeback may be real, but the headline isn’t tariffs — it’s AI’s appetite for power, chips, and infrastructure.