Data-storage and data-center suppliers, not chipmakers, were 2025’s AI market winners
Storage and data-center infrastructure stocks outperformed traditional AI chip and tech giants in 2025 as hyperscalers poured capital into building capacity. SanDisk led the S&P 500 with a near-580% gain; Western Digital and Seagate also landed among the top performers. By contrast, Nvidia—which historically dominated AI-related gains—rose about 40% and ranked 71st. Investors rotated toward “AI picks-and-shovels”: companies supplying storage, power, cooling, wiring, and construction for data centers. Notable names include SanDisk, Western Digital, Seagate, Amphenol, Corning, NRG Energy, GE Vernova, Vertiv and Eaton. Analysts expect storage demand to remain strong into 2026 but see mixed upside (SanDisk ~8% upside; Pure Storage ~38% potential). Contractors and power-infrastructure firms (Quanta Services, MYR Group, MasTec, Emcor) and specialist HVAC/water suppliers (Comfort Systems, Xylem, Ecolab, American Water Works) are also beneficiaries. Bitcoin miners are increasingly pivoting to high-performance computing/data-center hosting — examples: Bitdeer, Riot, Cipher Mining — leveraging existing low-cost power to secure long-term HPC contracts. The shift suggests traders should watch storage and data-center infrastructure stocks for AI exposure, monitor analyst targets and capex announcements from hyperscalers, and track miner conversions that could reallocate electricity away from crypto mining. Key implications for traders: sector rotation toward AI infrastructure, narrower upside for some winners as valuations reprice, and potential volatility if hyperscaler spending slows (historical parallels include post-pandemic supplier gluts).
Neutral
The news signals a sector rotation rather than a market-wide directional shift. Storage and data-center suppliers gained massively on concrete hyperscaler capital expenditure, creating clear trading opportunities in specific infrastructure names. That is bullish for those niche stocks and miners converting to HPC because it implies sustained demand and revaluation potential. However, several mitigating factors cap overall bullishness: (1) concentration risk — a handful of hyperscalers drive demand, so any slowdown would quickly reverse gains; (2) analyst targets suggest limited upside for some winners (e.g., SanDisk); (3) historical precedent (pandemic supplier glut) shows sharp reversals can follow rapid capacity expansion. Short-term impact: higher volatility and continued outperformance for targeted infrastructure stocks, especially around earnings and hyperscaler capex updates. Traders may see momentum trades and sector rotation flows into storage, power, and construction names. Long-term impact: structurally positive for companies that secure multi-year contracts or unique technical positions (specialized cooling, power, wiring, vertical integration), while pure cyclical suppliers may face normalization and margin compression. For crypto markets specifically, miner pivot to HPC reduces incremental demand for mining hardware and electricity for crypto production, which could dampen miner-driven selling pressure of crypto assets over time but also introduces capital redeployment risk. Overall, the development is tradeable and theme-driven—positive for selected equities and neutral for broader market/crypto stability unless hyperscaler spending materially changes.