Investors rotate from Magnificent 7 and bitcoin into AI infrastructure

The so-called Magnificent 7 stocks and bitcoin have lost momentum. Microsoft is down 33% from its highs, Meta 28% and Tesla 20%, while Amazon, Nvidia and Alphabet trade more than 10% below their peaks and Apple is the best performer at -7%. Bitcoin has slumped about 50% from its October all-time high.

Capital is not abandoning AI so much as shifting toward the companies that supply its backbone. Investors are rotating into semiconductors, memory-chip makers and the real estate needed to host vast server farms; memory-chip maker Sandisk has surged roughly 800% this year and the Global X Artificial Intelligence & Technology ETF, which focuses on memory-related companies (DRAM), is up about 140%.

Microprocessor and semiconductor plays have also outperformed, with Micron Technology up about 230% this year and the VanEck Semiconductor ETF rising 67%. SpaceX, which is expanding into AI, drew attention last week when it raised $75 billion in the largest IPO in history.

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