Core Insights - The artificial intelligence trade is evolving, with investors increasingly focusing on technology "pick-and-shovel" stocks as major cloud service providers invest billions in new data centers [1] Group 1: Market Performance - Data storage companies have become dominant in the S&P 500 Index in 2025, with Sandisk Corp. shares increasing by nearly 580%, making it the best performer in the index [2] - Western Digital Corp. and Seagate Technology Holdings Plc also performed well, ranking second and fourth respectively in the S&P 500 [2] - Nvidia Corp., previously a top AI stock, gained 40% in 2025, ranking 71st in the index, indicating a shift in market dynamics [3] Group 2: Investment Strategies - Investors are advised to look beyond traditional tech stocks to identify themes that will drive sales and earnings growth, with AI being a significant theme [4] - There is potential for better valuations by investing in companies benefiting from hyperscalers' spending on data centers, rather than directly in hyperscalers themselves [4][5] - Portfolio managers emphasize focusing on lesser-known companies that provide essential services and products for AI growth, rather than established hyperscalers [5] Group 3: Market Concerns - There are concerns on Wall Street regarding a potential slowdown in spending related to AI, which could negatively impact stocks tied to this sector [5] - Historical parallels are drawn to the pandemic, where demand for certain products surged but later led to a market glut, affecting suppliers dramatically [6]