AMERICANMADE
Elon Is Quietly Doubling Down on This Bizarre Asset (Join Him with $2)
From PayPal to Tesla to SpaceX, Elon Musk has a habit of seeing around corners.
Now he's doubling down on a technology Jeff Brown calls "W.T.E."
It's not self-driving cars, artificial intelligence, or rocket ships.
Yet Jeff believes it could be 90 times bigger than AI and 1,900 times bigger than Bitcoin.
Click here to see what has Elon's full attention…
And how to invest alongside him with as little as $2.
We’ve spent seven weeks tracing where American manufacturing dollars go. Steel mills, aluminum smelters, tractor factories, submarine yards, guitar workshops, bourbon distilleries, and the robots that run the lines. Thirty-plus issues. Dozens of companies. One thesis: America is building again.
Today, the last Bet of the series, I want to close with the company that sells to all of them.
Illinois Tool Works is the most diversified manufacturer in America. Seven segments: welding, food equipment, automotive parts, test instruments, construction products, polymers, and specialty packaging. It makes the Miller welding machines in every fabrication shop. The Hobart mixers in every commercial kitchen. The Instron testing rigs in every engineering lab. The Ramset fasteners in every concrete pour. It has been headquartered in Glenview, Illinois for 114 years.
ITW’s secret is a model called 80/20. It means: focus on the 20% of customers and products that generate 80% of your revenue. Cut the rest. Simplify. Then expand margins on what’s left.
It sounds simple. It is not. ITW has been refining this model for decades. Operating margin hit 26.3% in fiscal 2025. Two of seven segments are already above 30%. Management’s target is 30% enterprise-wide by 2030. In Q1 2026, Enterprise Initiatives added another 120 basis points of margin expansion on top of the base business.
That’s the thesis in one line: margins keep expanding even when revenue growth is modest. ITW doesn’t need a boom. It needs discipline. And 114 years of evidence suggests it has it.
Q1 delivered. Revenue was $4.02 billion, up 5%. EPS came in at $2.66, beating by 4%. Welding grew 6% organic. Test & Measurement grew 5%. Operating margin expanded 60 basis points to 25.4%. Free cash flow rose 6%.
Management raised full-year EPS guidance to $11.10–$11.50 — representing 8% growth. They expect 1–3% organic growth across all seven segments. And they plan $1.5 billion in share buybacks this year. The dividend was raised 7% to $1.61 per quarter.
Every company we’ve covered buys something from ITW. Caterpillar uses ITW welding equipment. Ford uses ITW automotive parts. General Dynamics uses ITW specialty products. Data centers use ITW construction fasteners. Restaurants serving factory workers use ITW food equipment. It is the connective tissue of American manufacturing.
If you don’t want to pick one reshoring winner, ITW is the bet that they all win. It doesn’t build the factory. It supplies everything inside it.
The bull case is the margin machine. ITW doesn’t need explosive revenue growth. The 80/20 model generates 100+ basis points of margin expansion per year regardless of the top line. Add the reshoring tailwind — more welding, more construction, more automotive — and you get earnings growth even in a slow economy. The 7% dividend hike tells you management believes it.
The bear case is valuation and organic growth. At roughly $263 and about 23 times forward earnings, ITW isn’t cheap. Organic growth has been flat for two years. The analyst consensus is “Hold” with an average target around $275 — barely above the current price. And some bears argue the margin expansion story is approaching its ceiling.
But here’s the closing thought. We started this series by asking a simple question: where does the money go when America builds something? After seven weeks, the answer is everywhere — steel, aluminum, concrete, power, cooling, software, and a thousand small parts that nobody thinks about until they break. ITW makes more of those small parts than anyone. It has for 114 years. And that’s the most American bet I know. Have a great weekend.