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

The theme of artificial intelligence investment is undergoing a shift. As major cloud service providers invest billions of dollars in new data centers, investors are snapping up stocks of the "pick-and-shovel" companies in technology infrastructure, rather than the chip giants that previously dominated the market. The beneficiaries of this round of AI trading have expanded from star companies such as Nvidia to broader sectors in the industrial chain, including data storage, power supply, and construction contracting.

According to statistical data, data storage companies led the S&P 500's gainers list in 2025. Sandisk's stock price soared nearly 580%, making it the best-performing stock in the benchmark index, Western Digital ranked second, and Seagate Technology ranked fourth. Meanwhile, power suppliers related to AI and manufacturers of cables and optical fibers, such as Amphenol Corp., Corning Inc., NRG Energy Inc., and GE Vernova Inc. all made it into the top 25.

This is in stark contrast to the past few years. As the original AI "pick-and-shovel" company, Nvidia was long among the top S&P 500 stocks. But this chip giant rose only 40% in 2025, ranking as the 71st best-performing stock in the index this year. Although Nvidia and cloud computing giants Microsoft, Meta Platforms, and Alphabet continue to drive the market due to their large scale, their percentage gains have begun to diminish.

Jake Seltz, a portfolio manager at Allspring Global Investments, said: "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. That's why we're broadening our horizons, beyond just the technology sector itself."

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

Room for Growth Remains in Data Storage

Wall Street expects the data storage sector to remain hot through 2026. However, the boom period for this year's winners may soon end. For example, analysts' average target price for Sandisk in 2026 is $264, only about 8% higher than the current price of roughly $244.

Analysts believe companies such as Pure Storage Inc. have more room to rise. The stock is currently trading at $68, but is expected to reach $94 in 2026, a gain of 38%. Other AI-related digital storage stocks include NetApp Inc. and Dell Technologies Inc.

Construction and Power Stocks Become Favorites

A range of stocks related to data center construction and power supply are expected to continue climbing. Matt Sallee, portfolio manager at Tortoise Capital Advisors, said the company does not hold any cloud computing giants, instead focusing on "the pick-and-shovel companies where these funds are flowing."

Quanta Services Inc. is one of his top picks. The company provides specialist contracting services for utility and telecommunications companies. Other contractors include MYR Group Inc., Primoris Services Corp., and MasTec Inc.

Meanwhile, companies related to wiring are equally sought after. Amphenol designs and manufactures high-speed fiber optic and copper interconnect solutions for data centers, while Emcor Group Inc. specializes in mechanical and electrical construction.

Other power infrastructure companies include Vistra Corp., Constellation Energy Corp., GE Vernova, and standby generator producer Generac Holdings Inc.

Cooling Systems and Software Sectors Worth Watching

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

Vertiv Holdings Co. provides power systems and cooling solutions for data centers, rising 40% in 2025 and remaining a stock worth watching. Eaton Corp. is another power management company. Other names include Comfort Systems USA Inc., which installs and maintains HVAC systems, as well as water suppliers Xylem Inc., Ecolab Inc., and American Water Works Co.

Some long-term focused investors are eyeing the software sector, believing that as large language models improve and more applications are built, the field will be future beneficiaries of AI.

Software stocks performed poorly this year overall, with the S&P 500 Software Industry Index rising 12% in 2025 compared to the 17% gain for the overall benchmark. But this makes the valuations of these stocks more attractive. Seltz said he is watching companies like Snowflake Inc., Datadog Inc., and ServiceNow Inc., "It feels like it still might be a bit early, but these stocks do look appealing."

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