Tech giants continue to throw money to “support” AI infrastructure stocks as soon as they clear the haze and welcome a rebound

The Zhitong Finance App learned that after falling sharply at the beginning of the year, AI infrastructure concept stocks are now rising sharply. This is because investments from big tech companies have re-boosted investors' confidence in the industry. The two stock combinations tracked by Goldman Sachs performed well: one group tracks AI data center and electrical equipment stocks, and the other tracks stocks of companies that supply electricity to data centers. The two groups of stocks are up 52% and 39%, respectively, from their April lows. The top performers include Vertiv Holdings (VRT.US) — which has risen 94% since April 4, and Constellation Energy (CEG.US) — which is up 75% over the same period.

Some of the world's biggest tech companies — including Amazon (AMZN.US), Alphabet (GOOGL.US), Microsoft (MSFT.US), and Meta (META.US) — are still investing heavily in artificial intelligence, which dispels doubts about whether capital will continue to flow to major AI infrastructure companies. According to Bloomberg analyst Robert Schiffman, capital expenditure projections to support AI demand have increased 16% since the beginning of the year.

Dave Mazza, CEO of Roundhill Financial, said: “The earnings season made investors understand that generative AI does not run on empty slogans, but on real materials — copper, large-scale electricity, etc.”

Shares of AI infrastructure companies performed extremely well last year, as expectations for the commercial potential of AI sparked a massive investment boom in data centers to drive the development of projects like ChatGPT and Claude.

A good start to 2025 then came crashing down, as concerns about competition from DeepSeek and broader uncertainty about global trade caused investors to question whether the multi-billion dollar investment was worth it. Concerns that tech giants like Microsoft are abandoning data center projects have further fueled this wave of sell-offs.

Investor sentiment generally improved when Trump said he would suspend most of the tariff measures he implemented in early April. The news triggered a rise in the stock market, bringing the S&P 500 close to its all-time high in February. And the recent earnings season helped boost investor confidence, as big tech companies said they would continue to invest in AI development. Among them, Meta indicated that its tens of billion dollar AI investment plan announced at the beginning of the year is still progressing according to plan.

Schiffman wrote, “The largest mega-tech companies — Amazon, Alphabet, Microsoft, and Meta — are continuing to increase capital expenditure to meet future demand for artificial intelligence, with huge cash reserves and access to low-cost capital.”

At the same time, recent corporate transactions also indicate that investment is continuing. For example, Amazon plans to invest $10 billion in North Carolina to expand its data center facilities to support the development of AI and cloud computing technology.

Of course, if the trade war heats up again and raises concerns that a slowdown in global economic growth will cause companies to reduce investment in AI, investors' confidence in AI may be hit once again.

Max Gokhman, Deputy Chief Investment Officer of Franklin Templeton Investment Solutions, said, “If the economy falls into recession, profits will be pressured, and companies will be forced to lay off employees and cut spending on AI.” He added that this situation was not his basic expectation.

Also, the intense competition from DeepSeek is remarkable. In January of this year, the company used its self-developed system to compete with systems from much larger US development companies, and its R&D costs were only a fraction of the latter. This performance shocked the entire AI field. The Chinese startup said last month that its upgraded AI model performed better than previous versions in performing mathematical operations, programming, and general logical reasoning, while also showing fewer errors.

Currently, however, people are enthusiastic about AI infrastructure companies, and the White House's support has provided them with additional impetus. Trump launched the “Stargate” project earlier this year, a data center built by OpenAI, which includes some of America's largest tech companies, and plans to invest $500 billion over the next four years in artificial intelligence infrastructure.

“There is a growing demand for AI infrastructure,” Gokhman said.