Evercore offers an investment guide under a "blue wave": AI infrastructure sentiment under pressure, names 5 "defensive" tech stocks.

Wall Street investment bank Evercore ISI stated that after the Democratic Party wins control of both the House and Senate in the 2026 midterm elections, Amphenol (APH.US), Arista Networks (ANET.US), Apple Inc. (AAPL.US), Cisco Systems, Inc. (CSCO.US), and Motorola Solutions, Inc. (MSI.US) constitute a group of "defensive" tech stocks that investors should hold. The bank's analysts wrote in a note to clients: "We believe (Democratic control of Congress) could affect our coverage of the entire IT hardware/networking sector, particularly potential regulation and legislation related to data centers." The analysts added: "Assuming the data center development environment becomes more restricted, this could bring more negative sentiment to AI infrastructure-related names within our coverage." Regarding data center construction, market sentiment in states such as Georgia, Ohio, and Texas could cool further, with companies including Tesla, Inc. (TSLA.US) and SpaceX (SPCX.US) having significant exposure to the Texas data center market. Shares of both companies, led by Elon Musk, fell on Wednesday. But analysts said the construction slowdown could actually benefit companies that had previously talked about "memory price increases," as demand for NAND and dynamic random-access memory (DRAM) could be suppressed, which would benefit Apple Inc., as well as PC-related companies such as Dell Technologies, Inc. Class C (DELL.US) and HP Inc. (HPQ.US). Additionally, various types of AI-related regulation could be strengthened, but how broad the scope of regulation will be remains unclear. Analysts also suggested that the current compute supply shortagewhich regulation could worsen furtherwill provide a pricing tailwind for developers and cloud computing companies that "already have substantial capacity in place," manifested in rising GPU hourly rates and data center rents. Finally, given the ongoing Iran war, GEO Group Inc politics could also become an issue. Evercore analysts wrote: "We believe the initial reaction will be to sell AI stocks, but the question is how much this changes fundamentals and whether other factors (inflation, yields) will form a hedge over time." Accordingly, the bank recommends investors buy the above five companies for different reasons. Analysts concluded: "Amphenol is our diversified way to retain AI exposure: higher signal, power, and optical content, combined with strength in defense, commercial aerospace, and industrial businesses, reduces dependence on any single AI architecture or customer group. If conditions head toward recession, this is the stock to holdit can better withstand historical demand fluctuations than most other companies. Arista is our high-quality way to express the AI/networking theme, with exposure spanning back-end AI, front-end, and campus deployments; the key debate remains supply-side execution and revenue conversion against a constructive demand backdrop. We acknowledge this is not a cheap stock, but from a margin perspective it is the highest-quality asset. There is ample room for growth from front-end cloud, campus, and new customer orders (Alphabet Inc. Class C, etc.), helping to sustain growth. Apple Inc. offers earnings drivers different from data center construction through its iPhone product mix and pricing as well as its services business; our research shows demand is resilient, with gross margin recovery and price elasticity being two key tests. When investors want to rotate to defense, this is the name worth continuing to track. Cisco Systems, Inc. had previously lagged relatively, and the reality is that it has quite a few tailwindscore campus products are in an upgrade cycle, and there are also tailwinds in optical communications and Silicon One. Motorola Solutions, Inc.'s role in delivering mission-critical solutions for public safety agencies gives it a macro-resistant (AI-independent) business model, while Silvus and D-Fend align the company with new growth vectors."