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Going into last week, semiconductor stocks were already suffering their worst monthly rout since 2008.
There was no single cause for the bearish turn.
Wall Street grew anxious about how quickly Big Tech could turn massive AI investments into profits. Reports that NVIDIA Corporation (NVDA) might backstop a large OpenAI data-center project revived “circular financing” concerns, while China’s fast-growing memory-chip industry raised new competition fears.
But then came last Wednesday’s Federal Reserve meeting (which I wrote about in Market 360 here).
The NASDAQ initially turned positive during Fed Chair Kevin Warsh’s press conference. But the rally abruptly reversed as Treasury yields surged, sending already-nervous investors rushing for the exits.
It looked like a capitulation day – the kind of washout that can finally exhaust the sellers and clear the way for strong stocks to bounce.
And that appears to be what’s happening.
For example, Microsoft Corporation (MSFT) has repeatedly said that limited capacity has prevented Azure, its cloud computing business, from meeting the demand it is seeing.
For a long time, Wall Street seemed to ignore those comments. They remained focused on the bill for all those data centers.
But when Microsoft announced earnings after the bell on Wednesday, the verdict was clear. Azure revenue surged 43% year over year in its latest quarter, while the cloud segment surpassed $100 billion in annual revenue for the first time.
The stock is up nearly 25% since Wednesday’s close.
In other words, this is not a “Field of Dreams” moment where Big Tech thinks it can “build it, and they will come.”
The customers are already there.
As Rob Spivey, Director of Research at our corporate partner Altimetry, explained in this week’s episode of Navellier Market Buzz, these companies are essentially scrambling to finish building the stadium while a crowd waits outside to get in.
Rob and I discussed the recent semiconductor rout, Wednesday’s capitulation day and why he believes the volatility has created new buying opportunities.
In fact, he identified two companies that could benefit as the AI infrastructure buildout continues.
Click the image below to watch the latest episode of Navellier Market Buzz.
If you haven’t already, to subscribe to my YouTube channel. Plus, if you’d like to learn more about Rob, .
Looking Beyond Today’s AI Leaders
Rob’s two recommendations make it clear: The AI boom is no longer benefiting chipmakers alone.
As companies race to build more data centers, they also need power generation, natural gas infrastructure, cooling systems, construction equipment and countless other products and services.
That creates opportunities in parts of the market that many investors may not immediately associate with artificial intelligence.
And this is just the beginning, folks.
The current AI infrastructure boom is being built around technologies like ChatGPT, Claude, Gemini and Grok. But behind the scenes, the U.S. government is preparing an even more ambitious project that could dramatically accelerate the pace of scientific discovery.
I call it the .
This project is designed to connect some of America’s most powerful supercomputers into a massive new AI system capable of tackling complex scientific challenges in medicine, energy, quantum computing and other fields.
And just as today’s data-center boom is creating winners beyond the semiconductor sector, this next phase could produce an entirely new class of AI investments.
My research team and I have identified several companies positioned to help build and power this system.
Sincerely,
91抖阴
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
NVIDIA Corporation (NVDA)
