When the AI Gold Rush Turns to “Shovel Sellers”: Wall Street Seeks the Next Wave of Valuation Depths, Storage and Energy Focus

The Zhitong Finance App learned that as large cloud service providers invest billions of dollars in new data centers, the investment trend in artificial intelligence is changing, and investors seeking cutting-edge investment methods are snapping up “seller” stocks in the technology sector.

In 2025, data storage companies dominated the S&P 500 performance. Sandisk Corp. (SNDK.US) shares soared by nearly 580% to become the best-performing component in the benchmark index. Western Digital (WDC.US) ranked second and Seagate Technology (STX.US) ranked fourth. Meanwhile, AI-related power suppliers, cable and fiber producers, such as Amphenol (APH.US), Corning (GLW.US), NRG Energy (NRG.US), and GE Vernova (GEV.US), also ranked in the top 25.

This is different from the situation in the past few years, when Nvidia, the original AI “seller”, was consistently ranked among the top stocks in the S&P 500 index. The chip giant rose 40% in 2025, making it the 71st best performing constituent stock in the index this year. Although Nvidia and the cloud hyperscale companies Microsoft (MSFT.US), Meta Platforms (META.US), and Alphabet (GOOGL.US) are still driving the market due to their huge size, their percentage increase has begun to wane.

“When market benchmark indices are relatively concentrated, it's important to find topics that drive sales and profit growth,” said Jack Seltz, portfolio manager at Allspring Global Investments. “AI is currently one of the dominant themes, and this is nothing new. So we're broadening our horizons and looking beyond technology.”

Many companies are benefiting from hyperscale companies spending billions of dollars to build data centers. By buying these dark horses, investors may be able to find room for growth and better valuations.

“We are concerned about the 'shovels and pickaxes' where these funds are being spent,” said Matt Sulley, portfolio manager at Tortoise Capital Advisors, which does not hold shares in any hyperscale companies. “To some extent it's a chip, but more of a few company names you haven't really heard of.”

Of course, Wall Street also has some concerns that spending may slow down, thereby reversing AI-related stock gains. This is similar to what happened during the pandemic, when demand for basic household health products surged.

“The COVID-19 pandemic hits, the world needs more masks, hand sanitizers, and all of these things,” said Jed Ellerbrock, portfolio manager at Argent Capital Management. But within six to twelve months, there was an oversupply, and “the companies that supplied these things went through a transition from the best period ever to the absolute worst.”

Despite this, investors are still optimistic about investing in AI as hyperscale companies continue to commit to investing. The following are the targets investors are currently buying to participate in the construction of science and technology infrastructure.

data storage

After Sandisk, Western Digital, and Seagate surged in 2025, Wall Street expects data storage to continue to be popular in 2026. However, this year's boom for these winners may be coming to an end. For example, analysts' average price target for Sandisk in 2026 is $264, which is about 8% higher than its current price of around $244.

Analysts believe that companies like Pure Storage Inc. have more room to rise. The company is currently trading at around $68, but is expected to reach $94 by 2026, a jump of 38%. Other AI-related digital storage stocks include NetApp and Dell (DELL.US).

Construction and electricity

A range of stocks linked to data center construction and power supply are expected to continue to rise. Quanta Services Inc., which provides specialist contracting services to utilities and telecommunications companies, is Tortoise Capital analyst Sally's first choice. Other contractors include MYR Group Inc., Primoris Services Corp., and MasTec Inc.

Companies involved in the cabling business are also popular. These include Amphenol, which designs and manufactures high-speed fiber and copper interconnect solutions for data centers, and Emcor Group Inc., which engages in mechanical and electrical construction. Other power infrastructure companies include Vistra Corp. (VST.US), Constellation Energy Corp. (CEG.US), GE Vernova, and Generac Holdings Inc., which makes backup generators.

Bitcoin miners

According to Sully, Bitcoin miners represent a potential “complete revaluation story” as they move from mining cryptocurrencies to powering data centers.

“They already have electricity and have been producing bitcoins for over five years,” he said. “They will redirect this power to higher-value, long-term high-performance computing escrow contracts.”

Companies in this field include Bitdeer Technologies Group, whose stock price jumped after announcing plans to further advance into AI in October. Shares of IREN Ltd. (IREN.US), Cipher Mining Inc. (CIFR.US), Riot Platforms Inc. (RIOT.US), and WhiteFiber Inc. (WYFI.US) were also boosted by the company's intention to switch to high-performance computing data centers.

Heating and cooling

Data centers require specialized, precision-controlled heating, ventilation, and air conditioning systems, creating demand for companies that manufacture these systems. Vertiv Holdings Co., which provides power systems and cooling solutions for data centers (VRT.US) rose 46% in 2025 and is still a stock to watch. Another power management company, Eaton, overlaps with Vertiv's business, but is less pure, according to Seltz.

Other companies in this field include Comfort Systems USA Inc., which provides installation and maintenance of HVAC systems, as well as water supply company Xylem Inc., Econ Group, and American Water.

softwares

As big language models improve and more applications are being built, some investors with a longer investment horizon are seeing software as a future beneficiary of AI.

“I think it's natural for investors to look for companies with cheaper valuations, huge growth potential, and the potential to actually benefit from AI applications,” said Melissa Otto, head of research for technology, media and telecommunications at Visible Alpha.

Software stocks generally underperformed this year. The S&P 500 software industry index rose 12% in 2025, while the overall benchmark index rose 17%. But that makes the valuation of these stocks even more attractive.

“I don't think those stories are over,” said Seltz of Allspring, who is watching companies such as Snowflake Inc. (SNOW.US), Datadog Inc. (DDOG.US), and ServiceNow Inc. (NOW.US). “It feels like it might be a little early, but these stocks do look appealing.”