The biggest winners in the rotation were memory and semiconductor stocks. Memory chip maker Sandisk (SNDK) has surged about 800% this year and the Global X Artificial Intelligence & Technology ETF, which focuses on memory (DRAM)-related companies, is up about 140%. In microprocessors, Micron Technology (MU) has gained about 230% this year, and the VanEck Semiconductor ETF (SMH) 67%.
These investments highlight a growing preference for companies providing the infrastructure behind the AI boom rather than the hyperscalers funding it.
Additionally, capital has been attracted to SpaceX (SPCX), Elon Musk’s space exploration company that is also expanding into AI. Last week, the company raised $75 billion in the largest IPO in history.
As AI has become the market’s dominant investment theme, the liquidity needed to fuel growth is growing even faster. Alphabet (GOOGL), parent company of Google, Amazon, Microsoft and Meta, is expected to spend a combined $725 billion in capital spending this year, a 77% increase from last year’s record high.
Free cash flow no longer fully funds these ambitions. Alphabet, Amazon and Meta collectively borrowed some $93 billion last year, representing about 6% of total corporate bond issuance.
Another source of support is also disappearing. Share buybacks fell 33% to $132 billion in 2025, reducing a key pillar of demand for these stocks.
