The biggest winners of the rotation have been memory and semiconductor stocks. Memory chip maker Sandisk (SNDK) is up 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) has gained 67%.
The investments highlight a growing preference for companies that supply the infrastructure behind the AI boom rather than the hyperscalers that finance 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 initial public offering in history.
While AI has become the market’s dominant investment theme, the cash needed to fuel growth is rising even faster. Google parent Alphabet (GOOGL), Amazon, Microsoft and Meta are expected to spend a combined $725 billion on capital expenditures this year, a 77% increase from last year’s record level.
Free cash flow no longer fully funds these ambitions. Alphabet, Amazon and Meta together borrowed about $93 billion last year, representing about 6% of total corporate bond issuance.
Another source of support is also fading. Share buybacks have fallen 33% to $132 billion in 2025, reducing a key pillar of demand for these shares.
