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Elon Musk’s Boring Company Eyes $20 Billion Valuation in New Funding Round

The tunneling startup is in talks to raise around $4 billion from investors

Elon Musk’s tunneling startup, the Boring Company, is in talks to raise new funding that would value it at around $20 billion, according to people familiar with the discussions.

The company is in talks to raise around $4 billion, some of the people said. The funding round hasn’t closed and the people cautioned that the terms could change.

Steve Davis, president of the Boring Company, didn’t respond to requests for comment.

The company builds tunnel boring machines that it claims can dig underground more cheaply than traditional construction companies. The startup, which spun off from SpaceX SPCX -2.68%decrease; down pointing triangle in 2018, owns a transportation network under the Las Vegas Strip in which drivers ferry passengers in Teslas to and from the Las Vegas Convention Center.

Boring was valued at around $5.7 billion after a 2022 funding round. That round raised $675 million from investors, including Vy Capital, Sequoia Capital and Founders Fund.

The company has pitched privately funded projects in cities including Baltimore, Chicago and Los Angeles, where the startup stood to make money from ticketed passengers using its underground transit system. Many of those projects haven’t panned out.

Still, many private-market investors see investments in Musk’s companies as sure bets and are willing to pay premiums for access to his portfolio.

Investors who backed Musk’s $44 billion takeover of Twitter had been underwater for months following the 2022 deal. But they eventually made money after the billionaire entrepreneur rolled the struggling social-media company into his artificial-intelligence startup xAI, and later folded the entity into SpaceX.

Valuations of Musk’s public companies Tesla and SpaceX have tumbled in recent days. Tesla shares fell 15% on Thursday. That erased $215 billion in market value after the electric-vehicle maker missed earnings targets and reported negative cash flow for the first time in two years.

Musk’s rocket company SpaceX went public in June in a record-setting IPO that raised $86 billion from Wall Street. Its market cap nearly doubled in the days after the offering before the shares fell around 50% from their peak in recent days.

Boring has a new loop under development in Nashville, which it is privately funding.

In February, it announced a new project to create an underground loop in Dubai. The company said the first four-mile phase would cost $154 million and take a year to complete. A second phase—expanding the route to 14 miles—is expected to take three years and cost $545 million. It’s unclear who will pay for the development of the project.

Europe can’t stop the tide of cocaine

The drug is more available now than in its 1980s heyday as street prices tumble and purity improves

On a naval base on Haulbowline Island, south-east of Cork, officers stationed inside a screen-filled room keep watch over a vast stretch of the Atlantic Ocean that has become a front line in Europe’s war against drugs.

“It’s needle-in-the-haystack stuff,” says the commander directing Ireland’s navy fleet operations, who asks not to be named. Part of his job is to spot anomalies in satellite and other imagery that may indicate small boats increasingly used by drug traffickers.

But even if he sees something worrying, the navy can only deploy “three maximum, and usually two” of Ireland’s eight vessels at a time, he says, due to staff shortages, repairs and the fact that two of the ships are unfit for the rough Atlantic waters. “We’re policing a million square kilometres,” he adds. “To be anywhere comfortable, I need at least 12 vessels.”

In the battle for the seas, drug traffickers are often coming out on top — making Europe, in the words of the UN, the new “primary destination” for cocaine.

The drug, once the preserve of rich European partygoers, has gone mainstream, with street prices falling by an average of 18 per cent between 2014 and 2024 while the products sold became 44 per cent purer, according to the EU’s drugs agency.

As authorities have stepped up interceptions at major ports, traffickers have kept ahead through sophisticated drop-offs at sea, enabled by encrypted communications, powerful speedboats, unmanned submersibles and GPS spoofing, which involves vessels faking their locations.

“You always have to stay up-to-date, because there’s always a new modus operandi,” says Jürgen Ebner, acting chief of Europol, the EU’s law enforcement agency. He warns of a “waterbed effect” — when authorities come down hard in one area it can just push problems somewhere else.

The scale of the problem is vast. Cocaine production in Latin America has quadrupled in the past decade, with criminal networks in Colombia, Peru and Bolivia exploiting global trade routes to shift vast quantities of the drug. Cocaine is also increasingly shipped from Brazil into Europe via west Africa.

The UN warns that supply could soon exceed demand, increasing traffickers’ incentives to dump even more product on to Europe’s streets.

“We’re not in a position to stop these flows,” says Mark Mellett, former chief of staff of Ireland’s Defence Forces, adding that European law enforcement agencies would require “real-time information of what’s happening on the ocean surface, seabed and in the aerial space above”.

The result is that more cocaine is available in Europe today than in the 1980s — often seen as the drug’s heyday — according to the UN. Last year alone, its residue in city wastewater rose by more than a fifth, according to the EU’s drugs agency.

In 2021, the agency estimated the European market was worth €11.6bn; Michael O’Sullivan, a former head of the Maritime Analysis and Operations Centre-Narcotics, a police and military patrol agency made up of nine European countries, believes its value is closer to €15bn today.

Lower prices and frictionless dealing on popular encrypted messaging apps have made cocaine more attainable. The idea that the typical user is someone looking to add a thrill to their night out is “not really true any more”, says Julien Garsany, head of the UN drug agency’s office in Brussels. “It really has penetrated all age groups and all layers of society.”

The drug is increasingly taken by teenagers, Garsany says. “Obviously their brain is not developed yet. So this is how you create a strong path towards addiction.”

European authorities have stepped up their fight by investing in port security and closer judicial co-operation. But drug gangs remain one step ahead.

The Irish fleet operations officer reckons law enforcers catch “maybe 10 per cent” of the cocaine shipped to Europe. Despite his stretched resources, he must also keep tabs on increasing visits by Russian spy ships and monitor maritime threats during several EU summits Ireland is hosting this year.

When it comes to drugs “you can only say you’re winning if you’re completely cutting off the supply”, the officer says. European navies and law enforcement share information but “are they getting it all? Is it killing the problem on land? Let’s be realistic, it’s not.”

Cocaine smuggling to Europe began in earnest in the 1980s when Colombian cartels sought to diversify from a saturated US market. At first, traffickers used yachts and motorboats. But from the 1990s surging volumes led them to use containers transporting goods such as fruit as well as ever more innovative methods, including dispatching “narco-submarines” direct to Europe.

Smugglers mix cocaine powder with other materials such as food, plastics, textiles, cardboard and even cowhides to disguise it for transport before extracting it in clandestine chemical labs later on. One technique involves chemically altering the drug and spraying it on to charcoal.

Over the past decade European countries have made seizures of staggering amounts of cocaine, particularly in large ports such as Rotterdam in the Netherlands and Antwerp in Belgium, where a record 118 tonnes was seized in 2023.

Since 2019, the number of seizures on the continent has outnumbered those in America.

But in the past three years there has been a “tremendous drop”, according to Kristian Vanderwaeren, Belgium’s head of customs. Belgian authorities seized 5.4 tonnes of cocaine in the first six months of this year in Antwerp, a 68 per cent fall from the same period last year — and a further decline from the total 55 tonnes impounded in 2025.

Many see the fall as an indicator that improved security is deterring drug dealers from channelling their products through big ports. Belgium has worked closely with private terminal operators and invested in equipment, such as mobile scanners, meaning they can now X-ray 15 to 17 per cent of containers deemed high risk immediately upon arrival, compared with just 5 per cent in 2023.

“Definitely there has been change, in the sense [that] there are not that many huge and massive cocaine shipments anymore,” says Robert Fay, head of the drugs trafficking unit at Europol.

But, as security at the big ports is stepped up, criminal groups are turning to GPS and satellite-enabled deliveries in the middle of the Atlantic as an alternative.

These at-sea drop-offs can involve fishing boats or large merchant “mother ships” carrying legitimate cargo unloading to smaller “daughter ships”. Sometimes low-value cargo, such as second-hand tractors, is used to put a veneer of legitimacy on what is really a drug shipment.

Alternatively, vessels such as fishing boats, speedboats or semi-submersibles controlled by criminals and only carrying drugs meet for cargo swaps at sea. Traffickers also sink containers that later open on a timer, allowing the drugs to float to the surface for collection.

The sheer size of the Atlantic provides drug gangs with a major advantage. Europol’s Fay says one area where criminal networks conduct drop-offs is around the Azores and Canary Islands, making Portugal and Spain key entry points for cocaine into Europe. “It’s quite a big piece of the Atlantic,” he says. “So you really need to know where to look.”

As part of the common European effort, Ireland, with its maximum of three ships, is tasked with patrolling a piece of the Atlantic that is more than 10 times its landmass. “If you do not have a physical presence delivering maritime enforcement, you’ve just left the doors wide open,” says one former Irish senior commander who asked not to be named.

The country is also feeling the effect of the narcotics onslaught back at home. Cocaine has become Ireland’s biggest problem drug, with the number of people receiving treatment for use rising by 336 per cent since 2017. Cocaine use in the past year — at 46 per cent of respondents who took drugs, according to the country’s Health Research Board — was far higher than the EU average of 29 per cent. 

The cocaine surge has come just as the resources deployed by Ireland have shrunk.

“Back in 2018, before this massive increase of drugs happened on the streets of Ireland, the navy had nine operational ships,” says the former commander. But then things “hit the rocks”.

Between 2019 and 2025, Irish crew numbers dwindled due to recruitment and retention problems, meaning patrols were spotty and ships barely operational, the former commander says. “And the floodgates [for cocaine in Ireland] opened . . . Ireland became a soft touch.”

Even when law enforcement knows where the trafficking is happening and can dispatch a ship and crew, the criminals often get away. Speedboats carrying cocaine can be difficult to track compared to the more contained environment of large ports, and chases on the open sea can be fatal. Two Spanish Guardia Civil officers died this year, and a Portuguese official last year, during collisions involving drug operations.

“The main issue here is how do we stop them?” says Paulo Gomes da Silva, head analyst at the maritime narcotics centre, which is based in Lisbon. “Even if we have the same assets as they do, it’s still very dangerous.”

The maritime narcotics centre seized a record 92 tonnes of cocaine from “go-fast” crafts and small vessels last year. But that was only the tip of the iceberg: it estimates 700 tonnes escaped, a rise of more than 40 per cent on 2024.

While the French navy is legally able to shoot at the boats to disable their motors, not all countries can follow suit due to differing national legislation “but this is definitely a goal,” says da Silva.

Law enforcement agencies’ efforts to interrupt the criminals’ communications have also enjoyed some success.

In 2021, Europol and other European police agencies cracked a key app used by traffickers called Sky ECC, yielding a treasure trove of decrypted messages that led to hundreds of arrests and is still being used in investigations today.

“Before Sky ECC we needed to go after the small criminals in the network and then try to move up in the chain to the big gangsters, but now we had a view on the way that they communicated among the leaders of the gangs themselves,” says Annelies Verlinden, Belgium’s justice minister.

Decoding the app helped law enforcement identify high-ranking traffickers. But for years, authorities across Europe struggled to get to them. Senior members of a “Super Cartel” that was believed, at its peak, to have supplied a third of Europe’s cocaine, lived openly in Dubai and other friendly jurisdictions, where they seemed untouchable.

That has changed, as one by one, Dubai has extradited top bosses including the Netherlands’ Ridouan Taghi and Italy’s Raffaele Imperiale. Both were jailed in their home countries in 2024. The biggest prize was April’s capture of Daniel Kinahan, an Irish cartel boss and leading Super Cartel kingpin. He is in jail in Dubai awaiting extradition to Ireland.

But Verlinden also acknowledge a “waterbed effect” as criminals flee to other jurisdictions. Jos Leijdekkers, the Netherlands’ most-wanted drug trafficker, who has been sentenced in absentia both in the Netherlands and in Belgium, is hiding out in Sierra Leone, a country that the maritime narcotics centre and Europol consider a hotspot for drug transshipments.

According to Europol, criminals are now moving back to more fragmented modes of communication. “They’re adapting, they’re using different ways of communication and it’s always one step in front of us,” says Europol’s Fay.

Drugs insurance

The money made through cocaine trafficking lies at the heart of Europe’s problem. Laurent Laniel, an analyst at the EU drugs agency, says that as the drug travels from Latin America to Europe’s streets, “the profit margins explode”, adding: “You can multiply your investment by 1,000 per cent.”

Most of the profit is made by intermediaries who organise logistics, operate like a service provider and even provide insurance. “The trade functions like a sand clock,” Laniel says. “You have a lot of producers at the top and then [a] very narrow number of logisticians, people who can organise the traffic, from there to the bottom part of the sand clock, which is full of consumers. In the middle, those people make the most money.”

Groups that control this part of the trade include Brazil’s largest cartel, the Primeiro Comando da Capital, the Mexican giants the Sinaloa and Jalisco New Generation cartels, and various Balkan groups.

Lower wholesale and retail prices for cocaine and higher purity “tells you that there’s a lot of cocaine available to be purchased in South America, and a lot transiting the Atlantic Ocean somehow,” says Laniel. He sees poverty as “a major driver” of criminal activity and consumption.

One country where the retail price has risen rather than fallen, according to UN data, is the UK, which one former senior European police officer says may be linked either to stronger demand or to traffickers’ perception that it is riskier to smuggle cocaine into the country than elsewhere.

Cocaine now accounts for more than a quarter of drug-related deaths in Europe. While most people take the drug at clubs, bars or at home, 9 per cent of users — and 8 per cent of crack cocaine users — report having taken it at work, according to a 2024 survey by the EU drugs agency.

“The missing element in the anti-drug efforts of the European Union is really treating demand,” says Garsany of the UN’s drug office, citing stigma around treating addiction as one of the factors. “If you only look at supply it’s called a war on drugs, and we know what happens: nothing gets solved.”

The war on the small drug boats of the Atlantic shows little sign of abating. Ireland, whose defence budget is growing but remains the smallest in the EU, operates blind at times with no sonar to look under the sea or military-spec air-surveillance radar.

The country’s defence department is looking to harness other technology and is working with Ubotica, an Irish tech company that conducts AI-enabled satellite monitoring. As it tries to keep up with gangs using GPS spoofing, the group uses its technology to spot anomalies in shipping patterns and monitor at-sea transfers. The navy is also looking into remotely piloted aircraft systems as they have greater reach than boats.

But Eugene Ryan, a former Irish commander who helped deepen European co-operation in the drug fight, is downbeat and says Ireland is “a hole” in Europe’s drug defences. “We’re losing the battle, unfortunately.”

Investors underestimate how balance-sheet strength might be a differentiating factor in what happens next

Polarising as its approach to service might be, Ryanair tends to do well when it comes to performance rankings. Yet in share price terms, the budget airline is one of Europe’s weakest this year. Investors are right to worry about rising fuel prices, but they underestimate how balance-sheet strength might be a differentiating factor in what happens next.

Without question, low-cost carriers are in the crosshairs. Ryanair’s shares have slipped 7 per cent since weaker fares led it to undershoot forecast profits on Monday, leaving it down almost a fifth this year — roughly in line with rival Wizz Air. EasyJet, the subject of takeover interest from US financial firms Apollo and Castlelake, said on Thursday that it too had lowered fares to boost demand.

In contrast, shares in big full-service rivals such as IAG and Air France-KLM are up. That makes sense, in so far as demand for premium long-haul travel should be more resilient than cheaper short-haul hops. Budget airlines can’t offset rising fuel costs with higher-margin premium products. Fuel accounts for just over a fifth of costs for European flag carriers, versus roughly a third for the no-frills crew, according to Bernstein analysts. 

As well as a general trend of rising demand for premium seats, Europe’s flag carriers have benefited from passengers’ wariness of using Middle Eastern hubs. Emirates’ long-haul capacity into Europe has fallen more than a tenth this year while Qatar Airways is down a fifth, according to UBS. Meanwhile, Asia-bound seats from Europe have risen between 8 and 13 per cent, depending on the departure country, compared with overall long-haul growth of just over 5 per cent.

So far this year, all European airlines have been loath to cut capacity significantly because the summer season is when they make their money. Financial hedges have also protected against soaring energy costs, but these will gradually wear off. If fuel remains high into the latter part of the year, winter flight plans will need greater trimming. 

That’s when Ryanair should come into its own. Absorbing losses will be much harder for more indebted carriers such as Wizz Air, with net debt equivalent to some five times this year’s ebitda on S&P Capital IQ estimates. Lufthansa and Air France run with net debt below twice ebitda, which, while manageable, limits their ability to aggressively grow market share by cutting prices. EasyJet, currently debt free, may be in a very different position if its private equity takeover goes ahead.

Winter season, when exuberant holidaymakers are harder to come by, is harsh for all airlines. High fuel prices will make this one even harder to bear. But what investors seem to be missing is that for those with the financial flexibility to do so, it could also be an opportunity to expand as rivals retrench.

Artificial intelligence and data centers are in the spotlight, but investors should pay attention to a less-noticed boom in global manufacturing. Ten ways to play the new wave.

Novartis started construction this year on a 700,000 square foot manufacturing hub in North Carolina as part of the Swiss drugmaker’s $23 billion investment in U.S. manufacturing and research and development.

South Korea’s Hanwha Group is expanding the former Philadelphia Naval Shipyard with a $5 billion investment to help rebuild U.S. shipbuilding. In India’s Kutch desert, wind turbines, solar arrays, and high-voltage transmission are being installed, creating the world’s largest renewable-energy park as the country looks to reduce its reliance on foreign oil.

As data centers and artificial intelligence dominate the headlines, a less-noticed building boom is under way, stretching across the globe as nations attempt to jump-start their industries in a bid to bolster national and economic security. This new global industrial cycle is sparking demand for building materials and equipment on construction sites, commodities needed for renewable energy and power grids, engineering services, and the automation and industrial components to build new factories—or retool existing ones. All of that spells opportunity for investors.

“We have four to five simultaneous capex booms,” says Steve Chiavarone, deputy chief investment officer at Federated Hermes, who sees this infrastructure buildout as the biggest since the U.S. railroads in the late 19th century. In addition to data centers, that includes upgrading national power systems, shifting production to the U.S. to avoid tariffs, and modernizing factories. All of that calls for upgrading basic infrastructure, such as ports and bridges.

The U.S.-China rivalry and Covid pandemic during the first Trump administration spurred discussions about diversifying supply chains away from China. But last year’s global tariffs, China’s successful use of its rare-earth dominance as leverage in trade talks, and another series of conflicts have kicked these efforts into higher gear. That in turn has fueled a race by countries to diversify their energy sources and reconfigure supply chains, especially for critical materials such as rare-earth magnets or the foundational chemicals needed for drugs.

“Security is increasingly the industrial policy—across the board,” says Benjamin Bahr, a fund manager at First Eagle Investments. “Since Trump’s second term, geopolitics and demands have accelerated. With two major geopolitical conflicts that have impacted logistics and the massive increase in demand from AI and electrification, spending has gone from a policy idea to necessity.”

The U.S. unveiled a $12 billion public-private partnership this year that includes investments in companies like MP Materials to ease China’s stranglehold on rare earths needed for everything from cars to weapons. Japanese Prime Minister Sanae Takaichi is proposing $2.3 trillion in investments across 17 sectors to revitalize Japan’s economy, with an eye toward security.

The European Union has proposed an 800 billion euro ($914 billion) package for rearmament and infrastructure. India, hit hard by the Iran war, is expected to invest $170 billion this year to bolster its energy resilience with grid improvements and investments in nuclear and solar energy.

Investors are catching on. The State Street Industrial Select Sector SPDR exchange-traded fund is up about 20% over the past year. Industrials are trading at a mid- to high-single digit premium to the S&P 500 rather than in line, as they typically have done. That’s partly because manufacturing is coming out of a funk as the U.S. emerges from a 25-year decline in U.S. manufacturing capital spending. Chris Snyder, Morgan Stanley’s head of U.S. multi-industry research, expects an incremental $10 trillion in spending in U.S. manufacturing over the next two decades. And that’s before factoring in the spending for data centers.

The spending would translate to the U.S. industrial economy going from almost no growth to 3%-plus annual growth, Snyder says. That sets up a favorable backdrop for stocks that could push valuations roughly 30% higher, adds Snyder.

Jefferies industrials analyst Stephen Volkmann likens this industrial arms race to the 1960s with the buildout of the Eisenhower highway system and a manufacturing construction boom amid Cold War spending on defense and space, technological modernization, and suburbanization.

The U.S. ISM Manufacturing Purchasing Managers’ Index hit 54 in May, its highest point since mid-2022 and the fifth-straight month in expansion territory. Global manufacturing PMI is nearing its strongest readings in recent years at 52.2 in June, and Morgan Stanley’s Asia Pacific strategists see Asia entering its strongest industrial cycle since the early years of this century.

Any pullback in AI investment would hit many companies—and likely the broader market. But fund managers expect the spending related to national security, self-reliance, and infrastructure upgrades to remain critical for the resilience countries are seeking.

Strategists think this industrial cycle will have long legs. As governments invest, they create incentives for others to join. Venture-capital firm Andreessen Horowitz launched an American Dynamism practice to focus on defense, manufacturing, and aerospace start-ups bolstering the country’s economic security.

JPMorgan Chase launched a $1.5 trillion Security & Resiliency Initiative that aims to make direct equity investments to help fill the holes in sectors critical for national security. That includes robotics, pharmaceutical precursors, and rare-earths, plus frontier technologies like AI, quantum computing, and cybersecurity. Also in this bucket: defense technology, battery storage, and ways to make the power grid more resilient.

Some beneficiaries, like European defense companies, have had a strong run and may be in for a breather. Others, like South Korea and Japanese industrials that have become dominant in automation, robotics, and shipbuilding, are well positioned for this industrial revival. They are worth keeping on a watchlist if there is a pullback in the AI-oriented hype that is driving their broader markets higher.

The fund industry has jumped in with new products such as the $291 million Tema U.S. Manufacturing & Reshoring ETF (ticker: WELD), geared toward mid-cap stocks and up 31% year to date. Two older and broader infrastructure ETFs are among the ones seeing the most inflows, according to MorningstarDirect: the $13.9 billion Global X U.S. Infrastructure Development (PAVE) and the $4.5 billion iShares U.S. Infrastructure (IFRA).

Sam Klar, who manages the actively managed GMO Domestic Resilience ETF, says investors aren’t fully appreciating the potential winners. He cites companies facilitating the building like Jacobs Solutions, an engineering and construction firm managing complex projects such as a new biologics facility manufacturing GLP-1 drugs in North Carolina.

Concerns the company could see AI cannibalize parts of its business have hit the stock, which is trading at a 20% discount to the market. But Klar sees the AI fears as misplaced and expects double-digit earnings per share growth over the next five years. “They are in a perfect place for the reindustrialization of America because they help build complex stuff with precision engineering that is not easily replaced by AI,” Klar says, adding that the company has raised its earnings per share guidance and has been buying back stock amid the volatility.

Among the most basic beneficiaries of a building boom are companies providing the aggregates for construction, such as Martin Marietta Materials, which recently agreed to a $13.5 billion acquisition of Lhoist North America, to create the biggest lime and limestone producer. The acquisition should bolster Martin Marietta’s profitability and exposure to a reindustrialization that isn’t fully appreciated by the market, says Philip Ng, Jefferies building products analyst. “For an industry where volumes have been flat but the company has had a lot of pricing power, this reindustrialization opportunity could generate 3%-plus growth on volumes alone,” he says.

Plus, the company gets only 5% of its business from data-center buildout and another 5% related to power infrastructure that also helps support AI, Ng says. Even if there is a pullback in that spending, analysts note that much of the money from the infrastructure bill signed during the Biden administration still has to be spent to upgrade highways, tunnels, and bridges, continuing to feed demand.

Copper is a critical commodity for the electrification and digitization of the economy, needed for the power grid upgrades required to support a manufacturing revival. Grupo Mexico is home to Mexico’s largest freight railroad and copper mining business through an 89% stake in Southern Copper, which has low-cost copper mines in Mexico and Peru and projects lined up to expand copper production by 50% by 2035.

Grupo Mexico stock trades at a 37% discount to Southern Copper and allows investors to get access to Mexico’s rail network—another beneficiary of manufacturing moving away from China and into Mexico—essentially for free. Plus, the company is net cash positive, generating enough cash to fund its operations. “If national security means rebuilding physical capacity, copper is one of the first bottlenecks you run into,” Bahr says. “Grupo Mexico owns the input everyone needs before the factories, grids, and data centers can get built.”

Equipment rental companies such as United Rentals and WillScot Holdings are leading indicators of manufacturing activity. WillScot’s mobile offices, for example, are often the first and last thing on a construction site. Both companies reported a pickup in orders in recent earnings calls. WillScot said the 8% order growth for its modular units in the first quarter beat its internal expectations. United Rentals Chief Executive Matthew Flannery highlighted strength in orders related to industrial, power, mining, and minerals as a “wide variety” of new projects, from healthcare to power, got off the ground, adding that the momentum “is a lot broader than just data centers.” Both stocks trade around 20 times 2027 earnings. Analysts expect 14% earnings growth next year for United Rentals and 23% growth for WillScot.

The new manufacturing being built in the U.S. and developed world is likely to lean heavily on automation. That’s one reason Rockwell Automation is a top pick for Morgan Stanley’s Snyder, who favors companies facilitating the supply-chain migration and building American industrial capacity over manufacturers themselves.

Rockwell is likely to see the benefits of industrialization faster, since companies look to retool or expand existing plants before breaking ground. The focus on national security likely means some of Rockwell’s Chinese rivals won’t be competing for the same business in the U.S., Snyder adds. The stock trades at 32 times earnings, a premium to the market. But Snyder says the valuation is near where it traded during past periods of strong orders in 2018 and 2021, yet its earnings outlook is better.

“It’s unclear why the stock should trade at a discount to its own history when the market growth outlook and company execution has improved,” he adds. And as U.S. manufacturing capital spending returns from two decades of flatlining, Snyder sees longevity to Rockwell’s growth, which he thinks underpins the case for a higher valuation.

Asia’s Advantage

Among the best places to tap this industrial boom globally is in Asia—especially South Korea and Japan. They have been building their industrial capacity for years as the U.S. and others focused elsewhere. That makes their companies appealing partners for Western companies that might be trying to reduce their reliance on Chinese companies in critical areas.

South Korean defense companies Hanwha Aerospace and LIG Defense&Aerospace are seeing an influx of orders and multiyear backlogs amid demand from the Middle East and Europe, says Ian Chun, a senior research analyst at Sands Capital. South Korea has emerged as the second-largest arms dealer to Europe after the U.S.

Many industrial Korean companies are standouts in their niches. Hyosung Heavy Industries makes ultrahigh-voltage transformers needed in electric transmission and within the broader electric value chain—something few companies produce, Chun says. The company has a foothold in the U.S. that has helped it emerge as a trusted supplier and gain market share. While orders may take longer to build, Doosan Enerbility is one of a handful of companies outside of Russia and China that can provide a critical component for the buildout of nuclear energy in Western countries.

The broad-based iShares MSCI South Korea ETF has about a fifth of its assets in industrials, including Hyosung Heavy and Doosan, giving U.S. investors an easier way to get into these companies. South Korea’s Kospi Composite index is up 61% this year, fueled by excitement over memory giants SK Hynix and Samsung Electronics and momentum-driven retail investors.

While analysts don’t see the valuations for many of these industrials as too rich, the market is susceptible to volatility. Strategists see a pullback as a chance to buy. “We are talking about multiyear trends that are showing developed countries that they have to promote their own industry—and that is a durable trend,” says Matt Gertken, chief geopolitical strategist at BCA Research.

If You Like SpaceX, You’re Going to Love This SpaceX Supplier

Applied Aerospace & Defense is in the rare position of supplying SpaceX. The stock has other things going for it as well.

Investors keen on getting exposure to space but unconvinced about the prospects for SpaceX still have options. One just so happens to be a supplier to Elon Musk’s trillion-dollar rocket and artificial-intelligence company: Applied Aerospace & Defense.

A few factors have left shares disconnected from fundamentals. As the background issues fade, its stock can rise 40% over the coming year.

Applied Aerospace is a midsize supplier to the aerospace and defense industry, formed in 2025 through the merger of Applied Aerospace Structures and PCX Aerosystems. It builds hardware for space, missiles, and drones.

Sales in 2026 are expected to be about $675 million, up 35% year over year. Earnings before interest, taxes, depreciation, and amortization, or Ebitda, are expected to be about $150 million.

The company also finds itself in the rare position of being a SpaceX supplier, shipping landing hardware for the Falcon 9 rocket. It isn’t easy to identify SpaceX suppliers. Musk’s company does most of its manufacturing on its own. RBC Securities analyst Ken Herbert estimates that about 90% of SpaceX hardware is built in-house. For point of comparison, that number for Boeing would be closer to 40%.

SpaceX’s vertical integration highlights a problem for the industry, which Applied Aerospace plans to solve. “There’s not enough advanced manufacturers of highly complex systems,” says CEO Trip Ferguson, an ex-Marine who came to Applied from AeroVironment and who once served as the chief operating officer of BlueHalo, which AeroVironment acquired in 2025. “We have decided to focus on space and launch, defense aviation, [intelligence], and precision strike.”

His company makes everything from solar arrays and propellant tanks for spacecraft, flight control surfaces for unmanned aircraft and missiles, and power transmission products for helicopters, among many other things.

“Its biggest asset is scale, creating a one-stop shop for primes and defense tech companies alike to get proven consistent performance at a competitive price point,” says Jefferies analyst Sheila Kahyaoglu.

Bringing advanced manufacturing capabilities to the U.S., while serving growing businesses such as space and autonomous weapons, feels like a recipe for stock market success. That hasn’t been the case, though.

Applied sold shares in a June initial public offering at $20, raising about $650 million. That was mainly used to repay debt amassed as private-equity owner Greenbriar Equity built the company via acquisition. Shares traded as high as $24.24 shortly after the deal, but have failed to maintain altitude, closing below $17.50 apiece on Wednesday.

Greenbriar’s ownership is one issue that has weighed on investor sentiment. It still owns about 75% of the shares outstanding. Greenbriar is likely to sell eventually, and selling a lot of anything can drive down the price.

SpaceX’s performance has also been a problem. Shares are trading around $115, down almost 50% from a post-IPO high of nearly $226 per share, and well below the $135 IPO price. That peak-to-trough decline wiped out about $1.5 trillion in market value and took several other space-related stocks with it. Rocket Lab and AST SpaceMobile have both dropped roughly 40% since SpaceX’s IPO. Defense sector multiples have also contracted, says Bank of America analyst Ron Epstein. Through Tuesday trading, shares of drone defense technology company Kratos Defense & Security Solutions, for instance, were down 30% over the past three months.

The headwinds have been significant, but Applied Aerospace & Defense shares now reflect a lot of bad news. That can be an opportunity.

BofA’s Epstein rates the shares Buy. His price target is $24, up 40% from recent levels. A backlog north of $1 billion gives the company “visibility on growth in the near term,” he says, while the company’s “embedded” positioning with its customers supports “confidence in growth estimates.” Applied Aerospace is sole-source on more than 80% of its contracts.

Kahyaoglu’s price target is $25. She recently met with management at the biennial Farnborough Airshow outside of London, gaining confidence in Applied Aerospace’s missile and space products.

Their view isn’t unique on the Street. Overall, six of seven analysts covering the company have a Buy rating on the shares. The average Buy-rating ratio for S&P 500 stocks typically ranges from 55% to 60%. The average analyst price target for Applied Aerospace & Defense stock is about $25.

The $25 price values the company at about $4.7 billion, or about 29 times Ebitda expected over the coming 12 months. Aerospace companies in the Russell 1000 trade for about 20 times Ebitda. Of course, that’s based on the analyst price targets. Shares currently trade for about 21 times Ebitda. That’s a small premium to peers, considering Applied Aerospace & Defense is expected to grow sales at a midteens annual rate through the end of the decade. What’s more, growth can be supplemented by bolt-on mergers and acquisitions.

To be sure, investors face some risk from higher oil prices, which tend to drive down shares of aerospace players. And SpaceX stock will continue to catch other space-related companies in its massive trillion-dollar wake. Investors will also endure more volatility as Greenbriar’s stake unlocks near the end of 2026. But those aren’t reasons to avoid the stock altogether. Sometimes risks loom so large that investors forget about the potential reward.

Device makers with cash flow yields of 5% to 6% now trade at a 20% to 30% discount to the S&P 500 index.

Medical-device stocks were already one of this year’s worst sectors when they were walloped by disclosures from surgical-robot pioneer Intuitive Surgical and analytical device supplier Danaher.

Intuitive stock has lost 17% since it said last week that U.S. procedure growth was slowing slightly. Danaher dropped as much as 14% this past Tuesday, when it told investors of a sales shortfall in its bioprocessing supplies. All of this confirmed fears of slowing healthcare utilization that have sunk the iShares U.S. Medical Devices exchange-traded fund more than 20% this year.

Those fears are overblown, and medtech stocks are a bargain. Device makers with cash flow yields of 5% to 6% now trade at a 20% to 30% discount to the S&P 500 index.

“I’ve got the ability to invest in these high-quality medtech companies at higher free-cash-flow yields than a Treasury,” says Blake Goodner, co-founder of the healthcare-focused hedge fund firm Bridger Management.

The chief reason for medtech’s tumble is the artificial-intelligence boom, as growth investors have piled their bets on Nvidia and other beneficiaries of hyperscale spending. Device stocks should regain attention as AI enthusiasm normalizes; the healthcare names did better this year on the days when AI names sold off.

Another worry is that patients are postponing medical procedures since the Affordable Care Act’s premium subsidies ended in December and as federal Medicaid spending shrinks. Hospital chain HCA Healthcare cut its 2026 guidance last week, saying it was seeing more uninsured patients and a 2% to 3% decline in surgical volumes.

Goodner thinks federal spending on healthcare is stabilizing. Medicare Advantage payment rates have finally turned positive after a period of negative annual updates. Republicans have stopped threatening to “repeal and replace” the Affordable Care Act—aka “Obamacare”—and midterm wins by Democrats would calm Wall Street worries about healthcare access and utilization.

While the device makers haven’t been launching market-creating innovations—like the prior decade’s robots, minimally invasive heart valves, and fibrillation-fixing ablation devices—they continue to innovate and grow sales at mid- to high-single digit rates.

“What we’ve seen in a large part of this medtech ecosystem is you’ve seen growth slow, but still be durable,” says Goodner. “And you’ve seen profit margins and importantly free cash flow expand, which could usher in greater share repurchases and dividends, as well as M&A.”

With that outlook in mind, we size up six large-capitalization medical-device stocks.

Abbott Laboratories brightened the sector’s gloom with fine June-quarter results that showed wider margins and growth in even its slow segments like nutrition. Its new nutrition products will offer protein to GLP-1 users. There are device launches coming for treating heart arrhythmias and monitoring diabetes. With the stock at 16 times next year’s estimated earnings, analysts like Raymond James’ Jayson Bedford think that Abbott shares can rise 15% in the next year, to top $115.

Danaher disappointed fans this past Tuesday with June-quarter numbers marred by order delays for the resins used to separate biotech materials. That led the company to tweak the year’s sales growth forecast to 4% from 6%. The stock’s ensuing plunge was unwarranted. Danaher actually beat the quarter’s earnings forecast and raised its earnings guidance for the year to about $8.53 a share. Demand for its lab supplies and diagnostic products remains intact, as corroborated by the good June results posted on Thursday by rival Thermo Fisher Scientific.

Robotic surgery pioneer Intuitive Surgical has traded at a premium valuation in its two decade expansion, and it has earned it by beating growth expectations. Last year, it guided for 14% growth in surgeries and ended with 18%. It was the absence of a guidance boost in last week’s quarterly report that sank the stock, even though June earnings grew 24%. The stock’s drop is a buying opportunity. Just-announced competition from Johnson & Johnson won’t dent Intuitive’s robot monopoly. Intuitive is bringing out lower-cost products to blunt would-be competitors. Few on Wall Street see less than 20% upside for the stock.

Medtronic’s products for clearing carotid arteries are growing smartly, but its main products for cardiologists and neurologists aren’t growing much. Growth in overall sales is forecast to slow to 4% in the next fiscal year from 7% in the current year. The stock trades at a cheap multiple of 13 times next year’s earnings, and its current valuation makes next year’s expected free cash flow of $7 billion equivalent to a 7% yield. But investors may want to wait until growth comes back into view.

Boston Scientific has been the worst hit among the big device firms. The stock is down 50% this year after the company trimmed guidance for 2026 sales growth to 8% from 10%. That’s a big selloff for a small adjustment. The company is well managed and has new products coming out in markets where it leads, such as ablation procedures for atrial fibrillation. With its stock at just 13 times forward earnings, the company has a big buyback program. The current market capitalization makes its expected annual cash flow of $4 billion equivalent to a 6% yield.

Edwards Lifesciences shares have held their value this year while other medtech stocks tumbled. That’s because the company has beaten earnings estimates as sales of its minimally invasive heart valves continue to grow. On Thursday, it announced that June sales and earnings also beat forecasts. Expanded Medicare coverage and the readout from an important clinical trial should allow the beats to go on. Bedford at Raymond James calls Edwards “one of the cleaner growth stories in large-cap medtech,” and thinks the stock can rise to $100 from its current level of $84.

Startup investors poured capital into a varied lineup of large rounds this week, targeting sectors including physical AI, biotech, cybersecurity, AI infrastructure and fintech. By far the largest financing of the week was a $1.7 billion round for Uber founder Travis Kalanick’s physical AI startup, Atoms, followed by sizable investments for 3D AI model developer Meshy AI and battery technology company Sila.

1. Atoms, $1.7B, physical AI: Atoms, the physical AI startup founded by Uber founder Travis Kalanick, raised $1.7 billion in a funding round led by Andreessen Horowitz. Kalanick touted the Los Angeles-based company’s vision as “about the coming industrial revolution where large industrial economic sectors get completely digitized.”

2. Meshy AI, $400M, AI for 3D: Silicon Valley-based Meshy AI, a startup developing foundation models for AI-powered 3D generation, closed on $400 million in Series B funding at a $1.5 billion valuation. Lead backers include Monolith Capital, IDG Capital and Matrix Partners China, per Crunchbase data.

3. Sila, $300M, battery technology: Battery technology company Sila secured $300 million in a new round led by Atreides Management and Sutter Hill Ventures. The Alameda, California, company will use the funding to expand its silicon anode plant in Moses Lake, Washington.

4. Etched, $300M, inference technology: Etched, a co-designer of chips, racks, software and manufacturing methods for use in frontier models, picked up $300 million in Series C funding. Sequoia Capital led the round, which set a $10 billion pre-money valuation for the San Jose, California-based company.

5. Augustus, $180M, fintech: Augustus, a startup aimed at providing financial institutions around the world direct access to dollar accounts, secured $180 million in Series B funding. Tiger Global led the round, which set a $1 billion valuation for the San Francisco-based company.

6. Cathedral, $160M, defense tech: Cathedral, a startup aimed at expanding U.S. military cyber capabilities, reportedly raised $160 million with backing from Sequoia Capital and Andreessen Horowitz. The Washington, D.C.-based startup was reportedly founded by a ​team of former DOGE employees.

7. Crystalys Therapeutics, $130M, biotech: Crystalys Therapeutics, a biotech developing therapies for people living with gout, closed an oversubscribed $130 million Series B round. Frazier Life Sciences led the financing for the San Diego-based company.

8. Candid Health, $120M, healthcare software: San Francisco-based Candid Health, developer of a revenue cycle management platform for the healthcare industry, landed $120 million in Series D funding led by Sixth Street Growth.

9. Glow, $100M, cybersecurity: Glow, a Palo Alto, California-based AI-powered endpoint security startup, launched from stealth and announced it has raised $180 million to date, of which, per Crunchbase, $100 million comes from its newest financing. Lead backers include Sequoia Capital, Cyberstarts, Greenoaks, and Redpoint.

10. Neo Security, $75M, cybersecurity: Boston-based Neo Security, a startup working on an agentic software control platform for enterprises, picked up $100 million in a new round led by Bessemer Venture Partners and Andreessen Horowitz.

The new luxury lingerie brand founded by actress Christine Evangelista brings storytelling and heritage craft to luxury lingerie and loungewear fashions.

After years of working as an actress on hit shows like “The Walking Dead” and “The Arrangement,” American actress Christine Evangelista is embarking on a new creative chapter of storytelling with her debut luxury lingerie brand, Evangelista.

The brand, which launched Friday, features Italian-made lingerie and loungewear in rare Leavers lace, Italian silks and bespoke gilded hardware, and explores what Evangelista exclusively told WWD is the duality and many dimensions of womanhood through thoughtful design and heritage craftsmanship.

“I call it the reclamation of the divine feminine. It’s really about honoring and celebrating the wholeness of femininity. I believe we are both things: maternal and erotic, soft and strong. I take a lot of references throughout history through various religions, especially Catholicism with some of its iconography and symbolism, which is the foundational element in telling this story,” the creative director and cousin of Linda Evangelista said.

She noted that throughout her 20-year career as an actress, her core is being a storyteller. She wanted to bring forth history and passion to lingerie, which she considers the most intimate and emotional garment. “I was really fascinated with the psychology about how it changes and evolves with our bodies, our sexuality and where we are in our lives. I really wanted to honor that and honor the complexities of what it means to be a woman,” she said.

As a born and bred Long Island New Yorker, the actress and creative director explained that both her experiences of studying fashion at the Fashion Institute of Technology and working alongside costume designers for her characters’ wardrobes fueled her curiosity around design, specifically of “what we wear underneath,” she said.

This first culminated in 2020, when she launched and hosted a weekly podcast, “Half Naked With Christine Evangelista,” that homed in on exploring the intimates industry and expanded into her guests’ — ranging from costume designers to actresses — relationship with intimacy.

“I found that talking about our underwear was a gateway to a more revealing conversation about ourselves,” Evangelista said. Furthermore, she saw a gap in the intimates market for a more “couture level” of lingerie that had not only versatility and modernity, but also a sense of youthfulness.

“I think a lot of lingerie brands are focused either on the seduction, the eroticism, or the everyday basics, so I wanted something that had emotion, artistry but also a youthfulness with pieces to take you from day to night,” she said.

From here, Evangelista said she was on her own personal journey of finding herself, traveling the world to learn not only about Buddhism before landing in Italy for a deep dive in Catholicism, but also the textile heritage and century-old techniques used by the Italian manufacturers and ateliers.

“While there, I set off on another pilgrimage of learning about these factories. It wasn’t until I was there, really boots on the ground, that I started to see the history and learned more about these materials that are rare and dying,” she said of discovering authentic Leavers lace, one of the oldest and most labor-intensive forms of lace making still practiced today.

“The families that have devoted their lives and lineages to these companies, and the incredible heritage brands that they have been working alongside so long. It was being there, befriending them, learning and then seeing all these craft women’s vocations. They bring so much passion and devotion to what they do, and I really wanted to create something that honored that and showcase their work as much as mine,” she added of meeting with Pizval and Davos, both of whom are Evangelista’s partners.

To honor the heritage craft, Evangelista’s first collection features a carefully edited assortment of striking intimates and loungewear produced in Italy in small batches and blend comfort with structure. Styles — available in neutral black and white, as well as Renaissance-inspired, moody hues — include Leavers lace sleepwear, lingerie, silk jacquard separates, slipdresses and sculptural accessories. Evangelista noted the brand’s sizing currently ranges from XS to XL for luxe loungewear and 34A to 36D standard sizes for bras, with expansive sizing in the works.

Her key styles include a striking black lace corset; a playful and erotic set with removable bra, harness, underwear and more, and soft silk pajamas featuring custom abstracted feminine silhouette artwork and also feature custom hardware. These buttons, closures and hardware elements range from motifs of Mary Magdalene and a safety pin to a pearl for the Birth of Venus, a Sacred Heart and even a vagina.

“A lot of the collection is really designed to sort of pair and wear things together. I really wanted a versatility and a longevity component to it, for day to night and with a timelessness,” she said, pulling on Evangelista’s chic jacket over her black bustier top. It was a striking look that stood out for its balance of soft and structure, with seams bound in silk and scalloped eyelash trims, all of which played into to her brand’s elevated stance in the lingerie market.

Evangelista’s first collection drop, priced $95 to $2,200, is available to shop via the brand’s e-commerce and with exclusive retail partner Moda Operandi.

“Evangelista represents a fresh approach to the category, pairing a bold, unapologetic femininity with immaculate craftsmanship. As sheer fabrics and lace dominate eveningwear and the line between innerwear and outerwear continues to blur, we see a natural opportunity in elevated intimates,” Marc Rofsky, Moda Operandi’s vice president of merchandising, ready-to-wear, told WWD.

Going forward, the creative director said she will focus on direct-to-consumer events centered around creating space to honor womanhood, which could span from speaker-led events to trunk shows. She will also be approaching collections as organic drops to test the market and respond to her customer’s desired directions.

“We’ll certainly be leaning into inner-meets-outerwear pieces, and we’re also developing swimwear and bridal, which I’m very excited about. We’ll have bridal before spring, around February, and then soon after that, we’ll have swim for summer, and another lingerie collection after that,” she said of future collections, which will likely introduce new luxe materials — perhaps cashmere or elevated, organic materials for breathability, she said — that continue Evangelista’s ethos of elevated everyday.

Christian Louboutin helped to spark interest in Melides by opening a five-star hotel in 2023.

Anyone who has swiped through Meghan Markle‘s summer fun family photos from Portugal might be Googling “Melides” for a closer look.

The quiet coastal village rests along the Alentejo Coast and is home to nearly 1,500 year-round residents, as of the 2021 census. Before Prince Harry and the “As Ever” founder reportedly first bought property there, Condé Nast Traveler had pegged Melides as “Portugal’s Next Big Beach Town” in 2022.

Markle’s photos of Prince Archie racing into the surf and Princess Lilibet being flipped overhead in a swimming pool by Prince Harry are sure to up the interest in what is known as Portugal’s “Blue Coast.” Located about 90 minutes from Lisbon, Melides is known for its empty beaches, rural land, vineyards and sleepy pace. Markle’s photo of the traditionally sparse O Melidense restaurant hint at the area’s laidback appeal.

Before Prince Harry and Markle reportedly bought a villa for 6.3 million pounds at the CostaTerra Golf and Ocean Club a few years ago, Harry’s cousin Princess Eugenia and her husband Jack Brooksbank were reportedly regulars. The California residents are said to be renovating their residence in Portugal with help from SoHo House, the private members’ club with outposts in the U.K. and other locales. George Clooney and Sharon Stone are each said to have CostaTerra properties there. The company site bills itself as a “family-friendly real estate” with such options as “dune villas, golf pine barrens, and winery cottages.” Representatives at CostaTerra Golf and Ocean Club could not be reached for comment Friday.

Asked about SoHo House working with Prince Harry and Markle on their home in Portugal, a SoHo House spokesperson said, “To protect the privacy of our clients, we aren’t able to share any detail around any specific residential projects.”

Other high-profile personalities like Madonna and Amazon‘s Jeff Bezos have previously touched down in the area, which includes Comporta, Muda, Carvalhal, Grândola and Sines among other local towns. Christian Louboutin sparked some of the interest in Melides by opening the five-star Vermelho hotel with help from architects Madalena Caiado and Tarek Shamma in April 2023. The shoe designer has had a home there for years, as has the prized architect Jacques Grange.

In the summer of 2023, the five-time Grammy winner Janet Jackson shared snapshots from her Melides getaway on Instagram. “So charming — the shops, the architecture, the people — we loved it,” she posted.

Jackson also flagged one of Melides’ few shops, Vida Dura, which sells handcrafted dinnerware, vases, candlesticks and other home decor made by local artisans, as well as floral displays. Noemina is another shop that specializes in relaxed dresses and home decor with a flair for local textiles.

Although the area has been reeling in a more stylish crowd in the past few years, Kering’s chief brand officer Laurent Claquin recognized its appeal and built a home there 15 years ago. Along with the endless blue skies, fresh sea air, wind-swept dunes and relatively untouched nature, “At the end of the day, it’s the authenticity that people are looking for,” Claquin said. “You can be social and see friends going from one house to the next, or you can stay at your place and not see anyone.”

While of course the tides of change have swept through the area as more travelers have been discovering the Alentejo, Claquin said, “I would say it has changed for the best. There a few more restaurants that are delicious, one or two great hotels, a new French bakery and a gym, but it really stays true to itself.”