"The Seven Giants" Collectively Stall! Wall Street Exclaims: AI's Biggest Winner Has Changed

In the turbulent and uncertain start of the U.S. stock market in 2026, one type of trading remains remarkably resilient: going long on memory and storage.

Although shares of SanDisk, Western Digital, and Seagate Technology have recently pulled back, they remain among the top performers in the S&P 500 this year, having also performed well in 2025.

Analysts believe that large-scale investments in artificial intelligence (AI) are creating an “unlimited” demand for memory and storage components needed in data centers.

Rob Thummel, senior portfolio manager at Tortoise Capital, said, “Infrastructure is the core allocation focus right now.” The firm’s Tortoise AI Infrastructure ETF holds stocks of Western Digital, Seagate, SanDisk, and Micron Technology.

This strong performance of these stocks contrasts sharply with the trend of the “Big Seven” — which have all declined this year, with the index down about 10%.

As demand for memory and storage products surges among more AI super cloud providers, memory companies now have strong pricing power, which may prompt the market to reevaluate the industry’s traditional cyclical logic.

Thummel pointed out that these stocks fit the recent Wall Street focus on the “Halo” trade, which involves a “heavy asset, low淘汰率” investment logic. “The sell side is large tech stocks, which are underperforming; the buy side is infrastructure, memory, and data storage.”

This investment logic was further validated last week: Micron provided strong earnings guidance, indicating that AI spending is making this industry cycle larger and longer-lasting.

This also explains why, even as investors begin to question some companies’ aggressive AI investments (including potentially disrupted firms and long-term winners like NVIDIA), the memory sector remains favored.

Jamie Zakalik, semiconductor research analyst at Neuberger Berman, said, “The upside for the memory industry is more apparent, and they have strong pricing power. While ‘safety’ may not be the most accurate term, compared to other parts of the AI supply chain, these companies are easier for investors to understand and price.”

Undoubtedly, SanDisk has been the biggest winner in the S&P 500 over the past two years, soaring over 1850% since February 2025. Western Digital and Seagate also rank among the top twenty gainers. Although Micron fell 15% after earnings, it has still gained nearly 40% since 2026.

In comparison, the S&P 500 has declined about 4.5% this year, the tech-heavy Nasdaq 100 has fallen 5%, while the Philadelphia Semiconductor Index has risen about 9%.

Of course, the rise in memory prices is largely driven by supply shortages. Supply-demand imbalance has always been at the core of the industry’s cyclical fluctuations: price increases stimulate capacity expansion, but when demand weakens, prices can plummet.

Ann Miletti, head of equity investments at Allspring Global Investments, said, “Supply is still trying to catch up with demand. Over time, this issue will be resolved — it’s essentially a matter of timing.”

However, as large-scale cloud providers continue investing in data centers, investors remain optimistic about further upside in the memory sector.

Zakalik noted, “There are many reasons to be bullish on memory right now. The AI market is very different from traditional hardware, and the demand structure is different. Some believe this demand could be more structural — maybe this time really is different.”

Last week, NVIDIA CEO Jensen Huang said that AI chip sales could exceed $1 trillion in the coming years, further indicating that AI spending will continue to drive high demand, which is undoubtedly positive for investors positioning in memory.

Thummel concluded, “As long as large cloud providers keep investing and AI applications keep emerging, I see room for growth. Huang talked about future demand, and memory is a key part of it.”

（Source: Cailian Press）