How to play the AI-driven ‘blue-collar renaissance’
As artificial intelligence fears grip the white-collar world , Oppenheimer believes that the technology may ignite a “blue-collar renaissance” by driving up demand for the power and machines that will fuel the new technology. Concerns over AI disruption have gripped markets this year, leading to growing concerns about unemployment. Software, in particular, is an industry investors fear could be hammered by AI advancements. The sector has sold off this year, with the iShares Expanded Tech-Software Sector ETF (IGV) down 20% year to date. Just last month, fintech provider Block said it was laying off more than 4,000 employees , nearly half its workforce. Recent economic data has shown the same weakness, with nonfarm payrolls falling by 92,000 in February . The unemployment rate edged higher, to 4.4%. But Oppenheimer is hopeful that even if surging AI adoption disrupts office jobs, it can open doors elsewhere in the skilled trades . U.S. manufacturing employment saw significant losses last year, with the National Association of Manufacturers estimating that as of January 2026, employment in the sector is still below its pre-pandemic levels . “If one side of the AI-labor displacement debate is the rapid rightsizing of certain categories of white-collar office jobs, the other side is the resurgence in traditionally ‘blue collar’ jobs producing goods and services not easily displaced by code or text generation automation,” a team of Oppenheimer analysts led by Colin Rusch wrote in a recent report. “Yes, we believe the robots are coming to their assistance, but the world still needs the skilled workforce to build and service the machines that build the machines.” Rusch called the phenomenon a “nuanced reshaping of the labor market.” “Demand for more traditionally ‘blue collar’ jobs producing goods and services does not align with available supply, driving the need for incremental productivity technologies,” he wrote. “We see a multi-year supportive backdrop across our Industrial Innovation coverage universe where we see the picks and shovels of this next wave of the Industrial Revolution; physical AI, power, and the machines that make the machines that power, build and feed the world.” One big caveat: some of the trends highlighted in the report may depend on stable, long-term energy and agriculture prices, and high prices in the short term not curbing demand for companies such as Caterpillar and Deere. 5 investing themes The Oppenheimer analyst shared five investable themes to consider. The first is investing in the physical-to-digital connection, including “sensors and data pipelines into ecosystems.” This is now a “more valuable moat than ever,” Rusch said. “We view the enablement of a physical-to-digital connection as a structurally underinvested area and see perception and data processing companies in our coverage as key beneficiaries of automation trends,” the analyst wrote. “For advanced AI models to accurately capture and analyze real-world data streams, we view LiDAR as a necessary component as a ground-truthing sensor for otherwise camera and radar-based solutions.” Stocks to play this theme include: Aeva Technologies , Aptiv , Bentley Systems , Itron , Johnson Controls International , Mobileye Global , Ouster , Serve Robotics , Trimble and Tesla . Automation tools Rusch also identified an opportunity in automation tools that reskill or upskill a transitioning workforce. Companies to play this theme include Caterpillar , Deere , Rockwell Automation and Trimble . “Multi-step workflows appear throughout our coverage which we believe are more defensible to AI labor disruptions and support reskill/upskill of an increasingly blue-collar workforce,” Oppenheimer said in the 10-page report. “We believe tech provided by DE, CAT, and TRMB have transformed worksite experiences through guidance, task automation and AI agents, while ROK has integrated AI across its portfolio, focused on cloud-native design, production optimization and agentic plant information systems.” In-field labor augmentation is a third area where opportunities may lay in wait. lay. Rusch identified Vertiv , Forgent Power Solutions and Shoals Technologies Group as leaders, while Johnson Controls International , Trane Technologies and Lennox International could also help drive increased labor productivity in the field, and services growth through AI-enabled innovation. “Limited skilled labor availability within the trades will continue to support outperformance of solutions which can optimize required hours for skilled field labor, in our view. Within our Power and HVAC coverage, we see modularization of solutions and offsite fabrication/testing offering productivity gains,” the analyst said. Autonomous systems Companies such as Aurora Innovation , Mobileye Global , Serve Robotics and Symbotic are supporting autonomous physical systems, a fourth area. “As we see numerous companies reach commercialization of fully autonomous solutions, we expect humans to remain in the loop in several ways: Remote monitoring for safety and problem-solving purposes; Evolving maintenance and repair roles as fleet size expands; evaluating/redesigning bots and duty cycle optimization will grow in connection with fleet deployments,” the analyst wrote. The last investable area for Rusch is in areas of the market that will remain less affected. AI will primarily threaten white-collar office jobs, while other industries are less likely to be disrupted “and more likely to absorb innovations.” “This is particularly true for our [agricultural] coverage, where we see AI enabling innovations to meet evolving consumer demands,” which ought to benefit International Flavors and Fragrances and Ingredion , “while AI is an accelerant” for Corteva’s “novel trait development for seed genetics and biologicals,” he said.
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