For three years, the AI trade had one face: Nvidia. That’s changing.
It’s not that Nvidia is broken — the company’s revenue surged 65% to $215.9 billion in fiscal 2026, and its dominant 81% market share in AI chips underpins a $1 trillion order pipeline. But the stock is up only about 15% in 2026. Meanwhile, Intel has surged roughly 240% year-to-date and AMD is up 112%. That’s not a coincidence. That’s a rotation.
What’s Actually Happening
Wall Street has decided the AI buildout is too big for one company to own. Data centers don’t just need GPUs — they need memory, CPUs, networking gear, optical fiber, and storage. Investors are now pricing in a multi-year ripple effect across the entire compute stack, and the beneficiaries are companies that were barely mentioned during the Nvidia supercycle of 2023–2024.
Intel’s comeback is the sharpest example. The company’s server CPUs are now deployed in AI data centers to run inference workloads, and its ASIC revenue nearly doubled year-over-year in Q1, already reaching a $1 billion annual run rate. Apple is reportedly in preliminary talks with Intel to manufacture chips for U.S. devices — a deal that, if confirmed, would be transformational for Intel’s foundry ambitions.
Memory Is the Sleeper Story
Here’s the part most investors are skipping past: memory. Spending on memory chips is projected to jump from $216 billion last year to $633 billion in 2026, according to Gartner. The reason is simple — modern AI processors are inherently memory-bound. Performance is limited by how fast data can move into the compute core.
Micron crossed the $800 billion market cap threshold for the first time this year. SanDisk is up over 464% in 2026. Micron’s CEO has noted that major customers are only receiving 50–67% of their requirements due to supply constraints. When demand exceeds supply by that margin, pricing power follows.
- Intel (INTC): +240% YTD — server CPU demand, ASIC growth, foundry optionality
- AMD (AMD): +112% YTD — MI300/MI350 AI accelerator penetration at Meta and OpenAI, EPYC server share gains
- Micron (MU): $800B+ market cap, memory shortage driving pricing power
- SanDisk (SNDK): +464% YTD — the year’s top performer on Morningstar’s coverage list
The Risk Nobody Wants to Talk About
BTIG analyst Jonathan Krinsky has warned of a potential 25–30% correction in the Philadelphia Semiconductor Index, which is up 66% so far this year — calling the magnitude of the move reminiscent of 1999. The global semiconductor industry’s revenue is projected to reach $1.32 trillion in 2026, up 64% in a single year. Cycles that move that fast tend to create visibility problems on the downside.
The fundamentals are real. The demand is real. But so is the risk of overpaying when every analyst on the street has already upgraded their models.
What to Watch
Broadcom reports in early June — its custom ASIC franchise for hyperscalers is the next battleground to watch. AMD’s Q2 data center revenue will either confirm or stress-test the rotation thesis. And the Nonfarm Payrolls print on June 5 matters more than usual: if labor softens, consumer tech spending narratives could weigh on sentiment across the entire sector, even if enterprise AI spending holds.
The AI trade isn’t over. It’s just grown up enough to have more than one winner.
For informational purposes only.
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