A distinct pattern has surfaced in international markets halfway through a challenging year: assets related to the physical implementation of AI have surged, while a number of other assets that investors often resort to during uncertain times have faltered. Despite the backdrop of a war in the Middle East, political unrest, and rising oil prices, stock markets in several regions continued to reach all-time highs.
The most notable investments of the first half, according to Dan Coatsworth, head of markets at AJ Bell, were businesses that benefited from the surge in AI spending, while Bitcoin turned out to be “a shocker” and gold faded. Prices skyrocketed when the limited supply of AI computing collided with the demand, taking shares with it. While Western Digital, Micron Technology, and Seagate Technology all more than tripled in value, a rate of return that would often take many years to attain, SanDisk led the US market with a gain of more than 850% in just six months.
As the biggest tech companies compete to expand their data centers, the motivation is the enormous amount of high-speed memory and storage required to train and operate AI systems.
Intel, Dell, Advanced Micro Devices (AMD), and Applied Materials are among the other US stocks that have increased between 150% and 280% year to date as a result of the AI trade. Coatsworth pointed out that, over just six months of trading, it is an incredible run of events.
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