Evercore issues an investment guide for the "Blue Wave": AI infrastructure sentiment under pressure, names 5 "defensive" tech stocks.

According to Zhihu Finance APP, Wall Street investment bank Evercore ISI stated that after the Democratic Party gains control of both the House of Representatives and the Senate in the 2026 midterm elections, Amphenol (APH.US), Arista Networks (ANET.US), Apple (AAPL.US), Cisco (CSCO.US), and Motorola Solutions (MSI.US) make up a group of “defensive” tech stocks that investors should hold.

The bank’s analysts wrote in a report to clients: “We believe that (Democrats controlling Congress) could impact our coverage of the entire IT hardware/networking sector, particularly in terms of potential regulation and legislation related to data centers.” The analysts added: “If the data center development environment becomes more constrained, this may generate additional negative sentiment for AI infrastructure-related companies under our coverage.”

Regarding data center construction, market sentiment in states such as Georgia, Ohio, and Texas may cool further, with companies like Tesla (TSLA.US) and SpaceX (SPCX.US) having significant exposure to the Texas data center market. Both companies, led by Elon Musk, saw their stock prices decline on Wednesday.

However, analysts stated that a construction slowdown could actually benefit companies previously mentioning “storage price increases,” as demand for NAND and dynamic random-access memory (DRAM) may be suppressed, which would favor Apple, as well as personal computer-related companies such as Dell (DELL.US) and HP (HPQ.US).

Furthermore, all kinds of regulations related to artificial intelligence may be strengthened, though the exact scope of regulation remains unclear.

The analysts also noted that the current shortage of computing power—which regulation could further exacerbate—will provide pricing tailwinds for those development enterprises and cloud computing companies that already have considerable capacity in place, reflected in rising GPU-hour rates and data center rental fees.

Finally, with the ongoing Iran conflict, geopolitics could also become an issue. Evercore’s analysts wrote: “We believe the initial reaction will be a sell-off in AI-related stocks, but the question is to what extent this will change the fundamentals, and whether other factors (inflation, yields) will over time provide a hedge.”

Thus, the bank advises investors to buy the five companies mentioned above for varying reasons.

Analysts concluded: “Amphenol is our diversified way to maintain AI exposure: higher signal, power, and optical content, combined with strong performance in defense, commercial aviation, and industrial business, reduces reliance on any single AI architecture or customer group. If the situation heads towards a downturn, this is the stock to hold—it is better equipped than most others to withstand historical fluctuations in demand. Arista is our high-quality way to express the AI/networking theme, with exposure spanning backend AI, front-end, and campus deployments; the key debate remains the supply side’s execution and revenue conversion against a constructive demand backdrop. We acknowledge this is not a cheap stock, but from a margin perspective, it’s the highest-quality asset. Front-end cloud, campus, and new customer orders (such as from Google) provide ample growth runway, helping to maintain momentum. Apple offers a differentiated profit driver via the iPhone product portfolio, pricing, and services business, rather than merely data center construction; our research shows resilient demand, with gross margin recovery and pricing elasticity as two critical tests. When investors want to turn defensive, this is the stock worth monitoring. Cisco has previously lagged behind, but in reality, it has several tailwinds—the core campus product is in a refresh cycle, and there are also tailwinds in optical communications and Silicon One. Motorola Solutions’ role in delivering mission-critical solutions to public safety agencies gives it a business model resilient to macro factors (not dependent on AI), while Silvus and D-Fend align the company with new growth vectors.”