The Great Rotation: Investors Shift from Magnificent 7 and Crypto into AI Infrastructure

Here’s a paraphrased version in a clean financial-news style:

Capital is rotating away from the largest technology companies and Bitcoin as investors move into semiconductors, memory-chip makers, and space-related opportunities.

The AI-driven growth narrative behind the Magnificent 7 is increasingly being tested.

Stocks that led markets over the past decade are now under pressure as investors reassess the scale of AI-related spending and shift toward areas showing stronger near-term momentum.

Microsoft (MSFT) has fallen 33% from recent highs, while Meta (META) is down 28%. Tesla (TSLA), Amazon (AMZN), Nvidia (NVDA), and Alphabet (GOOGL) are each trading more than 10% lower, with Apple (AAPL) outperforming relatively, down about 7%.

The rotation is also visible in crypto markets, where Bitcoin (BTC) has dropped roughly 50% from its October all-time high.

Rather than exiting AI entirely, capital is increasingly moving into the infrastructure layer supporting the boom. This includes semiconductor firms, particularly memory-chip producers, as well as real estate assets tied to large-scale data center development.

The strongest beneficiaries of this shift have been memory and semiconductor names. Sandisk (SNDK) has surged roughly 800% this year, while the Global X Artificial Intelligence & Technology ETF, focused on memory and DRAM-related companies, is up about 140%. In the chip space, Micron Technology (MU) has gained around 230%, and the VanEck Semiconductor ETF (SMH) is up about 67%.

These moves reflect a growing preference for companies supplying AI infrastructure rather than the large hyperscalers funding the expansion.

Investor interest has also extended to SpaceX (SPCX), Elon Musk’s space and technology company, which is increasingly seen as linked to AI infrastructure development. The firm recently raised $75 billion in what is described as the largest IPO on record.

Although AI remains the dominant market theme, the cost of sustaining that growth is rising rapidly. Alphabet (GOOGL), Amazon, Microsoft, and Meta are expected to spend a combined $725 billion in capital expenditures this year, up 77% from the prior record.

However, internal cash generation is no longer fully covering these investments. Alphabet, Amazon, and Meta collectively raised about $93 billion in debt last year, accounting for roughly 6% of total corporate bond issuance.

At the same time, another source of support is weakening, as share buybacks have fallen 33% to $132 billion in 2025, reducing a key source of demand for equities.

Overall, the narrative has shifted beyond AI spending concerns. Markets are now in a clear phase of capital rotation, with investors moving out of the Magnificent 7 and Bitcoin—previous long-term winners—and into semiconductors, memory chips, and space-linked plays seen as the next beneficiaries of the AI investment cycle.