The Best Growth Stocks to Invest $1,000 in as Investors Rotate Out of Tech

The market rotation of 2026 so far is sending a clear signal: The days of relying on a small group of mega-cap tech stocks to drive your portfolio are on pause for now. It's not 2024 anymore, where companies like Nvidia climb into the stratosphere, carrying your portfolio with them. The Nasdaq Composite has been moving sideways, while the S&P 500 Equal Weight Index continues to climb, showing that gains are becoming more broad-based across the market.

If you have $1,000 available to invest today (or any amount really), the real question is not whether to rotate, but how to do it smartly and deliberately. Here are two under-the-radar growth stocks worth looking at that are not your typical tech offerings.

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Watts Water Technologies is a strong data center play

Watts Water Technologies (NYSE: WTS) isn't a name that appears on most investors' rotation watchlists. The Massachusetts-based manufacturer of plumbing, heating, and water quality solutions just reported record full-year 2025 results. They included sales of $2.44 billion (up 8% on a reported basis), an operating margin of 18.4%, and free cash flow of $356 million. Diluted earnings per share hit $10.17, up 17% from the prior year.

In layman's terms, this means that Watts is growing steadily, becoming more profitable, and generating strong cash flow, signaling a healthy, efficiently run business with improving earnings power.

But what makes Watts a steal right now is what the company is doing with data centers. Every artificial intelligence (AI) data center on the planet generates enormous heat, requires constant cooling, and depends on precise water management to stay operational. Watts has put itself in the middle of all this as an infrastructure provider for that buildout, supplying advanced cooling optimization systems, real-time leak detection, backflow prevention, and water reuse solutions for data center operators.

U.S. data center power demand could reach 106 gigawatts by 2035, up from roughly 25 gigawatts in 2024. The water systems that keep those facilities alive have to scale with them. As a result, company management is guiding for 8% to 12% sales growth in 2026, with operating margins expanding to the 18.8% to 19.4% range. The company also completed three acquisitions in a single month in late 2025 -- buying Haws Corp., Superior Boiler, and Saudi Cast. These buys expanded its addressable market in commercial and industrial water systems.

There is a risk worth watching before you invest: Watts' European heat pump business has been soft, and input cost pressures from tariffs remain a live issue. So, this isn't a risk-free investment.

But for an investor looking to put $1,000 into something tangible that benefits from the physical infrastructure powering AI, Watts deserves a serious look.

ATI is building the planes that go everywhere

If you want a growth stock tied to a global industrial renaissance, with consistent demand and without a speculative AI narrative, ATI Inc. (NYSE: ATI) is worth your attention. The Texas-based specialty materials manufacturer produces titanium alloys, nickel superalloys, and advanced components for the aerospace, defense, and energy sectors.

In fiscal year 2025, ATI posted its highest annual sales since 2012 at $4.6 billion, up 5%. What's driving it? Aerospace and defense revenue now accounts for 68% of ATI's quarterly sales, up from 65% a year ago, with jet engine sales growing 10% and defense sales growing 16% year over year.

The company extended and expanded its long-term titanium supply agreement with Boeing (NYSE: BA) in mid-2025, covering the full range of commercial airplane programs -- and also landed a multi-year titanium agreement with Airbus. To support those deals, ATI brought a brand-new, highly automated titanium alloy sheet facility online in Pageland, South Carolina, capable of producing sheets wider and longer than anyone else in the industry.

Think about what that means practically and for your portfolio. Every commercial aircraft built over the next decade will need high-performance titanium components. The global commercial aviation fleet is aging out. Airlines are desperate for more fuel-efficient narrow-body and wide-body planes.

ATI is locked into the supply chain for both of the world's dominant aircraft manufacturers at a moment when production ramp-ups are just beginning. Operating cash flow for fiscal 2025 reached $614 million, up from $407 million the prior year -- a 51% jump that signals the company is generating real cash, not just earnings.

Keep in mind, ATI has already run up quite a bit, and there could still be some bumps due to uncertain aircraft demand and limited production capacity. Even though the rotation trade is partly priced in, it may take time to fully play out.

These tickers do carry some risks, and neither of these companies will trend on financial social media discussion sites. That's kind of the point. Watts and ATI are riding tangible demand, and both delivered solid growth in 2025 heading into a stronger 2026.

If you've got $1,000 and a long-term investment mindset, these stocks make sense.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing and Nvidia. The Motley Fool has a disclosure policy.