Investing.com -- Barclays has singled out Epiroc and Sandvik as its top picks in the mining equipment sector, contending that a surging gold price is driving a spending cycle that will sharply separate the sector’s winners from losers.

Analysts led by Vlad Sergievskii stress that the current environment is "NOT a mining super cycle" — when spending across all major commodities accelerates simultaneously — but rather a gold-driven cycle.

Barclays forecasts global mining capital expenditure (capex) to rise 8% this year, the fastest annual increase in three years, but the gains are concentrated almost entirely in gold. The bank sees gold capex climbing 23% in 2026, reaching an all-time high last seen in 2012, while industrial metals spending grows by a much more modest 3%.

“With particularly favourable project economics, robust cash flow generation and the fragmented (less disciplined) structure of the industry, we expect gold capex to continue growing in 2027 as well,” the analysts said.

Lithium capex is expected to fall by a double-digit percentage, and bulk commodities are forecast to see no growth at all. The gap between gold and non-gold capex growth rates is the widest since 2016, according to the bank.

Barclays notes that listed gold companies are guiding for exploration budget increases of more than 30% this year, and unit operating costs are expected to rise by over 15% — a pattern the analysts see as common upcycle behavior that is particularly favorable for mining equipment utilization and aftermarket intensity.

Epiroc and Sandvik, which derive 30-40% of their revenues from gold, are expected to deliver double-digit top-line and order growth this year. In contrast, downstream peers with gold exposure of only 15-18% are unlikely to grow revenues beyond mid-single digits.

Barclays retained its Underweight rating on Metso, which the analysts described as “most vulnerable due to greater reliance on large copper greenfields,” and exposure to a backlog that includes projects at risk of delay in Pakistan and the Middle East. They also flagged Metso’s 21 times 2026 price-to-earnings multiple as elevated.

At the same time, the team upgraded FLSmidth to Equal Weight from Underweight, citing a roughly 25% share price pullback since mid-February that brought its valuation to a more reasonable 16 times 2027 estimated earnings.

The bank raised its price target on the stock to 490 Danish kroner from 372 kroner.

Improving free cash flow conversion and a more balanced corporate strategy were also cited as reasons for the upgrade.