The AI trading winners of 2025 are still the "shovel sellers," but the biggest winner is no longer NVIDIA

The investment theme of artificial intelligence is shifting. As major cloud service providers invest billions of dollars into new data centers, investors are flocking to "picks and shovels" stocks in the technology infrastructure sector, rather than the chip giants that previously dominated the market. The beneficiaries of this round of AI trading have spread from star companies like NVIDIA to a broader range of industries, including data storage, power supply, and construction contracting.

According to statistical data, data storage companies dominated the S&P 500 index's gainers list in 2025. SanDisk's stock price soared nearly 580%, making it the best-performing stock in this benchmark index, with Western Digital in second place and Seagate Technology ranking fourth. Meanwhile, AI-related power suppliers and cable and fiber optic manufacturers, such as Amphenol Corp., Corning Inc., NRG Energy Inc., and GE Vernova Inc., all made it into the top 25.

This contrasts sharply with the past few years. As the initial AI "picks and shovels" provider, NVIDIA had long occupied a top position among S&P 500 stocks. However, the chip giant only rose 40% in 2025, becoming the 71st best-performing stock in this index this year. Although NVIDIA and cloud computing giants Microsoft, Meta Platforms, and Alphabet continue to drive the market due to their massive scale, their percentage gains have begun to weaken.

Jake Seltz, a portfolio manager at Allspring Global Investments, stated, "When the benchmark index is quite concentrated, it becomes important to look for themes that can drive sales and profit growth. AI is clearly one of the dominant themes right now, which is not new. So we are broadening our horizons beyond the tech sector itself."

However, there are concerns on Wall Street. Jed Ellerbroek, a portfolio manager at Argent Capital Management, compared the current situation to that during the pandemic: "When the pandemic hit, the world needed more masks, hand sanitizers, and other products, but within 6 to 12 months, there was an oversupply, and those companies supplying these items fell from their best times to their worst times."

Growth Potential in Data Storage Sector Remains

Wall Street expects the data storage sector to remain hot in 2026. However, the boom period for this year's winners may soon come to an end. For example, analysts have set an average target price of $264 for SanDisk in 2026, which is only about an 8% increase from the current price of approximately $244 Analysts believe that companies like Pure Storage Inc. have greater upside potential. The stock is currently trading at $68, but is expected to reach $94 by 2026, representing a 38% increase. Other AI-related digital storage stocks include NetApp Inc. and Dell Technologies Inc.

Construction and Power Stocks Become New Favorites

A range of stocks related to data center construction and power supply is expected to continue rising. Matt Sallee, portfolio manager at Tortoise Capital Advisors, stated that the firm does not hold any shares of cloud computing giants but focuses on "the shovel sellers where the money is flowing."

Quanta Services Inc. is one of his top picks, providing specialized contracting services for utilities and telecommunications companies. Other contractors include MYR Group Inc., Primoris Services Corp., and MasTec Inc.

At the same time, wiring-related companies are also in demand. Amphenol designs and manufactures high-speed fiber optic and copper interconnect solutions for data centers, while Emcor Group Inc. engages in mechanical and electrical construction.

Other power infrastructure companies include Vistra Corp., Constellation Energy Corp., GE Vernova, and Generac Holdings Inc., which produces backup generators.

Cooling Systems and Software Fields Worth Attention

Data centers require specialized precision temperature control, ventilation, and air conditioning systems, creating demand for companies that manufacture these devices.

Vertiv Holdings Co. provides power systems and cooling solutions for data centers, expected to rise 40% by 2025, making it a stock to watch. Eaton Corp. is another power management company. Other companies include Comfort Systems USA Inc., which provides HVAC system installation and maintenance, as well as water suppliers Xylem Inc., Ecolab Inc., and American Water Works Co.

Some long-term investors are focusing on the software sector, believing that with improvements in large language models and the construction of more applications, this field will become a future beneficiary of AI.

Software stocks have performed poorly overall this year, with the S&P 500 Software Industry Index rising 12% in 2025, while the overall benchmark index increased by 17%. However, this has made the valuations of these stocks more attractive. Seltz mentioned that he is paying attention to companies like Snowflake Inc., Datadog Inc., and ServiceNow Inc., stating, "It feels a bit early, but these stocks do look quite attractive."