AI trade keeps roaring with investors “looking for more ways to play offense”
Investors are riding the hot hands.
At the index level, Monday’s gain might be nothing to write home about, but it’s shaping up to be a session to remember for the volatile stocks that seemingly don’t stop going up.
Goldman Sachs’ high-beta momentum long index is enjoying one of its best days versus the SPDR S&P 500 ETF of the year, as of 11:29 a.m. ET.
AI infrastructure and other stocks that support the data center build-out are in full boom mode to kick off the week.
These include:
Memory stocks: Micron, Western Digital, and Seagate Technology Holdings.
No Sandisk so far, but back-from-the-dead Qualcomm is also continuing its recent revival as its CEO joins the group of executives traveling to China with US President Donald Trump.
Data center companies: Nebius, CoreWeave, Applied Digital, and Cipher Digital.
(IREN is left out, presumably because of its convertible note offering!)
Networking firms: Corning, Coherent, soon-to-be new Nasdaq 100 member Lumentum, Applied Optoelectronics, and Credo Technology Group.
Power: Oklo, Bloom Energy, and Plug Power (taking an optimistic interpretation of its tie to the build-out).
The even more speculative fringes: POET Technologies and Navitas Semiconductor.
Brian Garrett of Goldman Sachs describes the price reaction simply: winners are pressing their bets, and losers are being forced to do what the winners have been doing.
“Fundamental long short managers just had their second best weekly alpha in more than 5 years and are now +10.8% on the year... there is solid PnL in the book and investors are looking for more ways to play offense... grabbing for upside seems to be the first move,” he wrote in a note to clients this weekend. “‘Capitulatory stop ins’ was used on the desk this week for asset manager activity... most specifically forced length in AI infrastructure, while using anything non-AI as a source of funds.”
