America is in the midst of an infrastructure investment boom, spurred primarily by the AI revolution’s gargantuan demand for data centers and other related infrastructure. Big Tech is forecasted to spend over $700 billion on data centers in 2026 alone.

However, data centers aren’t the only things being built. AI data centers require massive amounts of electricity to run. As a result, a wave of investment is taking place to modernize America’s aging power grid to keep pace with the nation’s burgeoning energy demand.

Outside of AI and energy, another significant driver of America’s infrastructure buildout is the $1.2 trillion Infrastructure Investment and Jobs Act that was passed by the U.S. Congress in 2021. 

The bipartisan bill aims to infuse capital into various roads, bridges, power infrastructure, public transportation, and other related projects. Based on the latest available data, nearly $570 billion has already been awarded to various infrastructure projects.

This infrastructure boom provides a massive tailwind for industrial firms. And one of the companies positioned to benefit is ESAB Corporation (ESAB).

The firm operates two major segments, ESAB, a unit that specializes in fabrication technology and GCE, a leading provider of gas control equipment for industrial, specialty gas, and medical applications. 

The ESAB-branded business offers a wide variety of welding and cutting products and solutions. Its offerings include filler metals, gas equipment, plasma cutting, welding equipment, safety equipment, and related accessories and consumables. 

Meanwhile, the GCE unit sells regulators, flow meters, valves, torches, oxygen regulators, emergency equipment, high purity regulators, pressure regulators, and others.

The company recently announced its acquisition of Eddyfi Technologies, a firm specializing in inspection and monitoring technologies. The acquisition is expected to add $270 million in revenue and extend ESAB’s exposure to aerospace, defense, and nuclear sectors.

ESAB leverages a “razor-and-blade” business model, generating revenues through equipment and recurring consumables sales.

Consumables is the company’s primary revenue driver, accounting for 66% of the $2.7 billion in revenues it delivered in 2025.

The consistency that selling welding alloy and other consumables has helped the company garner steady returns in recent years. Since 2022, the company’s Uniform return on assets (“ROA”) has never fallen below 20%.

With the Infrastructure Investment and Jobs Act hitting peak implementation and the AI-driven infrastructure spending kicking into high gear, demand for the company’s products and solutions will continue to soar.

Despite this, the market is forecasting a decline in the company’s returns in the coming years.

We can see this through Valens’ Embedded Expectations Analysis (“EEA”) framework.

The EEA starts by looking at a company’s current stock price. From there, we can calculate what the market expects from the company’s future cash flows. We then compare that with our own cash-flow projections.

In short, it tells us how well a company has to perform in the future to be worth what the market is paying for it today.

Based on current valuations, the market expects ESAB Corporation’s Uniform ROA to drop to 18% by 2030—levels never-before seen for this business.