To The Moon

The artificial intelligence investment frenzy is ushering in a new hotspot, as major cloud service providers pour tens of billions of dollars into building new data centers, prompting a wave of investors to aggressively buy up "shovel seller" concept stocks within the tech sector to seize the early-mover advantage. In 2025, data storage companies led the gains in the S&P 500 index: SanDisk's stock price skyrocketed nearly 580%, topping the index's annual gainers list, while Western Digital and Seagate Technology ranked second and fourth, respectively. Meanwhile, AI-related power suppliers, cable and fiber optic manufacturers such as Amphenol, Corning, NRG Energy, and GE Vernova all secured positions within the index's top 25 gainers. This landscape marks a stark contrast to previous years—where Nvidia, as the leading first-generation "shovel seller" in AI, had long dominated the top spots for S&P 500 gains. In 2025, however, the chip giant rose only 40%, dropping to 71st place in the index. Although Nvidia, alongside top cloud service providers like Microsoft, Meta Platforms, and Alphabet, continues to influence market trends due to their massive scale, their stock price growth has begun to narrow. Jack Selz, a portfolio manager at Invesco, stated, "When index concentration is high, it's crucial to identify thematic trends that can drive revenue and profit growth. AI is undoubtedly one of the most central themes right now, which is why we are broadening our perspective and looking at related opportunities beyond just the pure tech sector." Massive investments by leading cloud service providers in data center construction are creating growth potential and valuation advantages for a new wave of beneficiary companies, establishing them as a fresh direction for investor positioning. "Our primary focus is on the 'shovel seller' companies that are part of the tangible implementation phase of this enormous capital expenditure," said Matt Sallee, portfolio manager at Tortoise Capital Advisors, which holds no stock in the major cloud service providers. "While chip companies benefit, more opportunities are emerging from previously lesser-known names." Of course, concerns exist on Wall Street: if cloud service providers' capital expenditure slows, the gains of AI concept stocks could retract, mirroring the market trajectory for basic home medical supplies during the pandemic. "Following the COVID-19 outbreak, demand for items like masks and hand sanitizer surged," said Jed Elefbrook, portfolio manager at Argen Capital Management. Yet, within just 6 to 12 months, overcapacity emerged in those supplies, and "those supplier companies went from peak to trough very rapidly." Despite these risks, continued strong investment commitments from top cloud service providers are maintaining a bullish stance among investors towards the AI sector. The following are key areas where investors are currently focusing within the tech infrastructure theme: Data Storage Sector Following the significant gains by SanDisk, Western Digital, and Seagate in 2025, Wall Street anticipates the data storage sector will remain hot in 2026. However, last year's top performers might be nearing the end of their rally: for instance, the average analyst price target for SanDisk in 2026 is $264, implying only about an 8% increase from its current price of approximately $244. Analysts see greater upside potential for companies like Pure Storage: with its current stock price around $68, the 2026 target price reaches $94, suggesting a potential 38% gain. Other AI-related digital storage plays include NetApp and Dell Technologies. Infrastructure and Power Sector A host of concepts stocks related to data center construction and power supply are poised to continue their upward trend. Tortoise Capital's Sallee cites Quanta Services as a top pick, a company providing specialized engineering contracting services to utilities and telecom firms; other related contractors include MYR Group, Primoris Services, and MasTec. Wiring-related companies are also highly sought after, including Amphenol, which designs and manufactures high-speed fiber optic and copper interconnect solutions for data centers, and EMCOR Group, which focuses on electrical and mechanical engineering construction. Other players in the power infrastructure space include Vistra Energy, Constellation Energy, GE Vernova, and Generac Holdings, a leader in backup generators. Bitcoin Mining Companies Sallee indicated that Bitcoin mining companies are pivoting from cryptocurrency mining to providing power for data centers, creating a potential opportunity for "valuation reassessment." "These companies already have established power resources, often secured for mining operations for over five years," he said. "They are now looking to redirect that power towards higher-value, long-term contracts for high-performance computing (HPC) hosting." Notable names in this area include Bitdeer Technologies—whose stock surged in October after announcing further moves into AI—as well as Enel SpA, Cipher Mining, Riot Platforms, and White Fiber Optics, which have also seen their stocks buoyed by plans to transition towards HPC data centers. Temperature Control and Cooling Sector The need for high-precision temperature-controlled HVAC systems in data centers is driving demand for related equipment providers. Vertiv Holdings, which provides power systems and cooling solutions for data centers, saw its stock rise 46% in 2025 and remains a focus for the market. Selz from Invesco noted that another power management company, Eaton, has some overlapping business with Vertiv but is not a pure-play thematic stock. Other companies in this sector include Comfort Systems USA, which specializes in HVAC installation and maintenance, as well as water treatment firms Xylem, Ecolab, and American Water Works. Software Sector Some long-term investors are turning their attention to the software sector: as large language model technology evolves and various applications are deployed, software companies are positioned to become long-term beneficiaries of AI. "Investors naturally gravitate towards companies that are undervalued, have significant growth potential, and stand to see tangible benefits from the deployment of AI applications," said Melissa Otto, Head of TMT Research at Visible Alpha. The software sector overall has shown weak performance this year; the S&P 500 Software Industry Index gained only 12% in 2025, underperforming the broader index's 17% rise, but this has also made sector valuations more attractive. "The investment thesis for these types of stocks hasn't broken," said Invesco's Selz, who is monitoring companies like Snowflake, Datadog, and Salesforce. "While it might be early to invest at this stage, the valuations of these stocks have become attractive."