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AI May be the "Boring" Stock Gold Rush

AI May be the
AI May be the "Boring" Stock Gold Rush
7:56

An investor recently posed a simple but striking question in Reddit's r/stocks forum: What are the "'boring' stocks with tech-like returns?" The premise was straightforward: "Everybody is chasing the next AI hype," they said, mentioning companies like Palantir, Rocket Lab, and semiconductors. So why not look for the quiet performers instead?

The Reddit crowd responded with names most mainstream investors overlook: Parker-Hannifin, Comfort Systems USA, Berkshire Hathaway, and various HVAC companies. The logic was seductive: boring businesses that keep infrastructure running are everywhere and often profitable. But here's the thing about "boring" stocks generating tech-like returns—they're not actually boring at all.

The Parker-Hannifin Reality Check

Let's start with Parker-Hannifin (NYSE: PH), the motion and control technologies company that Reddit loves to call boring. The data tells a different story. For the current fiscal year, ending in June 2025, analysts expect Parker-Hannifin's bottom line to rise 5.2% year over year to $26.77 per share. The company has exceeded consensus estimates in each of the last four quarters.

But here's where it gets interesting: Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. This isn't your grandfather's industrial company. The Aerospace Systems segment offers products for commercial and defense airframe and engine programs, including flight control systems, fuel systems, and hydraulic systems.

PH beat its EPS estimate 100.00% of the time in the past 12 months, while its overall industry beat the EPS estimate 48.11% of the time in the same period. Companies that beat earnings estimates 100% of the time aren't boring—they're exceptionally well-managed.

The Comfort Systems USA Phenomenon

Then there's Comfort Systems USA (NYSE: FIX), the HVAC company that's become Reddit's favorite "boring" stock. If you had invested in Comfort Systems Usa stock at $19.75, your return over the last 27 years would have been 2,287.34%, for an annualized return of 12.47% (not including dividends).

But let's look at the recent numbers. Comfort Systems USA (NYSE: FIX) reported strong Q1 2025 financial results, with net income reaching $169.3 million ($4.75 per diluted share), up from $96.3 million ($2.69 per diluted share) in Q1 2024. That's a 75% increase in earnings per share year-over-year.

The company's backlog grew significantly to $6.89 billion as of March 31, 2025, compared to $5.99 billion at December 31, 2024. As of 20-Jun-2025 the stock price of Comfort Systems USA is $500.02. The current market capitalization of Comfort Systems USA is $17.6B.

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The "Boring" Stock Myth

Here's what Reddit gets wrong: these aren't boring stocks. They're sophisticated industrial companies with significant exposure to high-growth sectors. Parker-Hannifin's aerospace division is riding the commercial aviation recovery and defense spending boom. Comfort Systems USA is capitalizing on the massive infrastructure spending and data center construction wave.

The real story isn't that boring companies are secretly profitable—it's that Reddit investors are finally discovering what institutional investors have known for years: industrial companies with strong competitive positions and exposure to secular growth trends can generate exceptional returns.

The Valuation Reality

Let's talk numbers. According to 14 Wall Street analysts that have issued a 1 year PH price target, the average PH price target is $754.79, with the highest PH stock price forecast at $842.00 and the lowest PH stock price forecast at $575.00.

But here's the kicker: PH is trading at a 752% premium. That doesn't sound very boring, does it? When a stock trades at a 752% premium to some baseline, it's priced for perfection, not ignored by the market.

The Infrastructure Gold Rush

What Reddit calls "boring" is actually the infrastructure gold rush. These companies are benefiting from massive secular trends: reshoring of manufacturing, data center buildout, defense spending increases, and the energy transition. Parker Hannifin, a Fortune 250 company specializing in motion and control technologies, highlights its impressive track record of 68 consecutive fiscal years of dividend increases, positioning it among the top five longest-running dividend-increase records in the S&P 500 index.

Companies don't maintain 68 consecutive years of dividend increases by being boring. They do it by being exceptionally well-managed businesses with sustainable competitive advantages.

The Reddit Effect on "Boring" Stocks

The irony is that Reddit's "discovery" of boring stocks might make them less boring. When retail investors pile into industrial stocks expecting easy returns, they often find these companies have complex business models, cyclical earnings, and exposure to economic volatility that makes them anything but boring.

Revenue for the first quarter of 2025 was... 75% higher than the spectacular results we achieved in the first quarter of 2024. Comfort Systems USA's CEO called their Q1 2025 results "spectacular" and noted that per-share earnings exceeded "every past quarter."

The Competitive Moat Question

The real question isn't whether these stocks are boring—it's whether they have sustainable competitive advantages. Parker-Hannifin's network of over 17,000 independent distributors gives it access to high-margin aftermarket revenue. Comfort Systems USA's rollup strategy has created a national platform in a fragmented industry.

These aren't boring stocks. They're sophisticated industrial companies with strong market positions, secular growth tailwinds, and management teams that have delivered consistent results over decades.

The Valuation Trap

Here's where the Reddit crowd might be walking into a trap. When "boring" stocks start generating tech-like returns, it's often because they're no longer boring—they're priced for growth. Parker-Hannifin price target raised to $785 from $680 at Mizuho suggests Wall Street isn't treating this as a value play anymore.

The companies Reddit thinks are boring have already been discovered by institutional investors, hedge funds, and analysts. The "boring" premium is already priced in.

Boring Stock, Interesting Returns

Reddit's search for boring stocks with tech-like returns reveals a fundamental misunderstanding of how markets work. Stocks that generate tech-like returns aren't boring—they're exceptional businesses that have been recognized by the market and priced accordingly.

The real boring stocks are the ones that are actually boring: companies with declining market positions, limited growth prospects, and management teams that haven't adapted to changing market conditions. Those stocks don't generate tech-like returns—they generate boring returns.

Maybe the lesson here isn't to find boring stocks, but to understand that exceptional businesses in any sector can generate exceptional returns. The boringness was never the point—the business quality was.


Ready to move beyond the Reddit hype cycle? Contact Winsome Marketing's growth experts to develop investment strategies based on actual business fundamentals, not social media sentiment.

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