Reshoring and the drive for supply-chain independence are transforming U.S. manufacturing, as more companies move production back to domestic locations. In recent years, several factors, including the post-pandemic supply-chain vulnerabilities, trade-disputes, geopolitical tensions along with President Trump’s recent tariff policies, have been fueling this business reshoring momentum.
With the imposition of import tariffs on steel, aluminum, semiconductors and other products, along with the presence of stringent sourcing rules, offshore production has become expensive for manufacturing companies. In response, companies have been moving production back to domestic locations to stabilize supply chains and evade tariffs. Also, the growing popularity of additive manufacturing and AI-driven business optimization across the US is lowering operational costs, making domestic production competitive.
Favorable U.S. government policies, including the CHIPS & Science Act and the Inflation Reduction Act (IRA), have also been encouraging steady investments in specific sectors like semiconductors, clean-energy and battery manufacturing.
This is fueling demand for advanced tools, factory equipment and transportation assets while lifting related industries such as machinery, logistics, power and energy. Reflecting this momentum, the S&P 500 Industrials Select Sector SPDR (XLI) has gained 19.3% so far this year.
Amid this development, we have discussed three stocks engaged in reshoring manufacturing operations, such as GE Aerospace GE, Caterpillar Inc. CAT and EnerSys ENS. These companies are actively engaged in reshoring their manufacturing activities and are expected to enter 2026 with strong growth potential.
These stocks are considered safer bets with market capitalization of more than $1 billion, as stocks with larger market capitalization can better withstand market downturns. Additionally, the Zacks Consensus Estimate for 2026 earnings has also been revised upward, highlighting their likely strong performance next year.
Caterpillar has been actively pursuing its reshoring strategy since it shifted its construction equipment production facilities from Japan to Georgia and Texas. This has helped the company to streamline its supply chain, reduce transit times and boost delivery capacities in North America. As part of its capital expansion plan, Caterpillar recently announced its plan to invest $725 million in its engine manufacturing facility in Lafayette, IN. The investment will focus on enhancing the facility’s workforce skills and catering to the rising demand for power generation engines.
As technology companies establish data centers globally to support their generative AI applications, Caterpillar is witnessing robust order levels for reciprocating engines for data centers. Sales will improve in transportation, courtesy of an increase in rail services driven by international locomotives. Growth in Marine as customers update aging fleets and growth in industrial will also drive its performance.
In the past year, CAT’s shares have surged 60.6%, outperforming the industry’s 58.4% growth. In the past 60 days, the Zacks Consensus Estimate for Caterpillar’s 2025 and 2026 earnings has increased 3.9% and 4.2%, respectively. Meanwhile, for 2026, this Zacks Rank #2 (Buy) stock is expected to report earnings growth of 19% on 8.3% revenue growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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EnerSys announced its strategic restructuring plan to boost manufacturing productivity and focus more on its higher-performance battery technologies like Thin Plate Pure Lead (TPPL) and lithium-ion. The realignment plan involves ENS ceasing operations in its flooded lead-acid battery manufacturing plant based in Monterrey, Mexico. EnerSys will move the production to its manufacturing facility in Richmond, KY. The move will allow the company to mitigate risks related to any future potential tariffs, maximize IRC 45X tax benefits and make its cost structure optimal.
In the long run, EnerSys is positioned to benefit from the Inflation Reduction Act (IRA). The company expects most of its TPPL products and some portion of high-density traditional flooded lead acid batteries to qualify for the proposed tax credits. EnerSys aims to invest the IRA tax credits to expand its high-density battery portfolio.
In the past year, ENS’ shares have risen 62.6% compared with the industry’s 2.6% growth. In the past 60 days, the Zacks Consensus Estimate for EnerSys’ fiscal 2026 (ending March 2026) and fiscal 2027 (ending March 2027) earnings has been revised up by 5.3% and 6.9%, respectively. For fiscal 2027, this Zacks Rank #2 stock is expected to report earnings growth of 20.7% on 3% revenue growth.
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GE Aerospace remains committed to making investments to boost growth. For 2025, the company remains on track to invest $1 billion in U.S. manufacturing and supply chain to boost production capabilities, upgrade equipment and cater to the growing demand for its engines and services. These investments are enabling GE Aerospace to boost its operational capacities, introduce new technologies to further reduce turnaround time and costs and provide better services to its commercial and defense customers.
This new investment accounts for almost double the commitment it made in the previous year and focuses on enhancing its engine quality, safety and delivery. This has also been creating about 5,000 U.S. jobs, including engineering and manufacturing roles. Some of its major facilities where GE is making investments include the likes of Greater Cincinnati, Muskegon, Durham, West Jefferson, Lynn and Madisonville.
In the past year, GE’s shares have soared 87.5%, outperforming the industry’s 32.6% growth. In the past 60 days, the Zacks Consensus Estimate for GE Aerospace’s 2025 and 2026 earnings has improved 0.5% and 0.1%, respectively. For 2026, this Zacks Rank #3 (Hold) stock is expected to report earnings growth of 13.1% on 11.9% revenue growth.
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This article originally published on Zacks Investment Research (zacks.com).
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