The construction sector has endured a mixed year on Wall Street as early optimism gave way to investor uncertainty in the second half of 2026. But could one of its brightest ETFs have slipped into bargain price territory when taking the sheer scale of data center spending into account?
The Global X US Infrastructure Development ETF (PAVE) slipped 8% in Q3 and has been forced to overcome severe periods of volatility in the days surrounding the midterm elections in the United States.
The fund has been forced into a reality check after growing 20.61% over the first half of the year, extending a long-term trend that coincided with the emergence of generative AI and subsequent data center gold rush, which has helped to propel the construction sector further owing to unprecedented levels of hyperscaler spending.
But the outlook surrounding this artificial intelligence-powered growth appears to have become more clouded of late. But could PAVE’s recent trend reversal, which saw a return to eight-month lows in November, be an opportunity for investors to buy into a fund with plenty of long-term potential.
Assessing the State of US Construction
To better understand the outlook for PAVE, the first place to visit is the construction sector’s relationship with the ongoing AI boom, and how infrastructure projects are fuelling the growth of the industry.
According to data compiled by Our World in Data, the money spent on building data centers in the US has grown five-fold since the launch of OpenAI’s ChatGPT AI model in late 2022.
By summer 2026, privately-funded spending had reached $4.26 billion per month in the United States alone, representing a seismic increase on the $868 million spent in December 2022.
US data center construction spending reached a record $96.5 billion annual pace in September, up 90% on year-ago figures, when taking costs associated with servers and storage into account.
However, there are some caveats to take into account. According to UBS CEO Sergio Ermotti, the outcome of the Democratic sweep in the midterms could cause a slowdown in the buildout of data centers, which may have ramifications in the short-term for the construction industry.
It’s also important to consider factors that are external to the AI boom, with census data highlighting that US construction spending slipped overall by 1.9% in September 2026 to a seasonally adjusted rate of $2.186 billion.
Compared to September 2025, the decrease is a more pronounced 2.7%, suggesting that macroeconomic and geopolitical factors are creating more widespread challenges for contractors.
PAVE as a Mid-Term AI Bet
The available data suggests that the US construction sector on Wall Street is showing an increasingly strong correlation with the buildout of the artificial intelligence sector.
Given that the industry is currently propped up by AI infrastructure construction spending, buying PAVE offers a level of diversification from artificial intelligence pure play stocks without abandoning the upside that the emerging technology is bringing to different areas of Wall Street.
Instead, PAVE is a broader infrastructure play that also incorporates raw materials producers, engineering and construction outfits, and makers of heavy equipment within its roster of 101 stocks.
Although we’re seeing plenty of infrastructure effort put towards AI, PAVE maintains a focus on other areas while maintaining a sufficient level of exposure to the industry in order to enjoy some degree of growth from a brightening outlook, making it an indirect AI play over the medium-term at least.
It’s also worth noting that we can expect innovations in artificial intelligence to provide a direct boost to the construction firms that adopt the technology for greater operational efficiency.
This can result in stronger project budgeting and cash flow control for construction stocks while also maintaining a higher degree of field service management through AI-powered tools that can protect against costly instances of noncompliance.
Given that errors that can be prevented by AI tools contribute to construction cost overruns, with as many as 85% of projects exceeding their original budgets in the US today, artificial intelligence adoption initiatives can do far more for the stocks encompassed within PAVE than provide a boost to their project pipelines.
Is PAVE a Buy?
The outcome of the recent midterm elections in the US has created a period of volatility for the Global X US Infrastructure Development ETF, but for those who believe in the long-term potential of the artificial intelligence boom, it’s clear that the construction landscape have become intrinsically linked to the sector and stands to benefit from its long-term potential.
PAVE is not only a fund that can indirectly benefit from the ongoing AI buildout, but its stocks are also more likely to benefit from artificial intelligence adoption initiatives, which are improving the capabilities and operational efficiency of construction firms at scale.
While the fallout of the Democratic Sweep of the House and Senate is likely to drive more volatility throughout Wall Street, PAVE remains a strategic bet on the future of AI while also offering a level of diversification through other areas that may deliver their own growth as the clouds surrounding the US economic landscape continue to clear.
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