Big tech AI spending is under fire but chip suppliers keep soaring — rotation into AMD and Intel
The giant tech companies like Apple and Microsoft have been selling off hard because investors are worried their massive AI spending isn't paying off. Meanwhile, the companies actually building the chips powering AI are soaring, and Meta just proved you can monetize that AI investment — making non-Mag-7 tech the place to be.
Idea
The Magnificent 7 just shed $2 trillion in market cap in June largely because investors are questioning when their colossal AI infrastructure spending will generate returns. But the money isn't leaving the AI theme entirely — it's rotating downstream. The smaller, overlooked chipmakers like AMD, Intel, and Micron added $2 trillion in combined value in Q2 as Wall Street broadened its bets on who profits from the AI boom. Meta's 8% pop on July 1st after announcing it will sell its excess cloud computing power is the perfect proof point: investors are desperate for companies that can show tangible returns on AI spending right now. The trade is to own the picks-and-shovels chipmakers who get paid regardless of whether the Mag 7's in-house AI projects succeed or fail.
What happened since
| Symbol | Dir | T+1 | T+5 | T+20 |
|---|---|---|---|---|
| AMD | LONG | +0.00% ✗ | +0.00% ✗ | — |
| INTC | LONG | -5.25% ✗ | -3.79% ✗ | — |
Price change since publication · updated Jul 11