After big gains in recent years, shares of AI tech giants like Alphabet and Amazon have fallen sharply as investors worry that returns from their big investments in developing smart AI systems won’t justify such lofty valuations. To profit from this spending spree, investors are focusing on the companies receiving the checks — chipmakers, data center builders and utility firms that provide the physical nuts and bolts behind the AI revolution, asset managers say.
US markets
Powered by
On 19 February 2026, 09:59 PM IST
S&P 500 Top Gainers
profiteers»
S&P 500 Top Losers
losers»
Several such stocks have posted double-digit gains this year, including Caterpillar, optical communications provider Lumentum and data storage company Western Digital, while the S&P 500 returned 0.52% and the Roundhill Magnificent 7 ETF, which captures the performance of so-called AI, lost 3% hyper AI.
New AI infrastructure products
That performance has prompted exchange-traded fund providers such as BlackRock, VistaShares and Impex Asset Management to revitalize their offerings and launch new products, some betting on a diverse — and increasingly niche — roster of AI infrastructure plays.
“Our goal is that every time someone like Meta or Amazon invests in data centers, we hear cash registers in our portfolio,” said Adam Patti, CEO of VistaShares, which launched its artificial intelligence supercycle ETF in December 2024. It grew by 58.4% in 2025 and has grown by 786% this year.
While the ETF includes AI heavyweight Nvidia, the semiconductor giant weighs less than half that of South Korea’s SK Hynix, whose chips are used in data centers. Other top holdings of the ETF include chipmakers such as Micron and Intel.
“When Meta says it’s going to spend $100 billion, it’s going to go to these companies,” Patti said.
Similarly, BlackRock’s iShares AI Innovation and Tech Active ETF now has 74% of its $8.8 billion in assets invested in AI infrastructure plays, from chipmakers to power companies that train AI models, up from 59% a year ago. “That’s where income is right now,” said Jay Jacobs, BlackRock’s US head of equity ETFs.
Healthy returns from holdings such as Fabrinet and Monolithic Power Systems have boosted the fund’s returns by 3.2% this year. BlackRock funds attracted $7.9 billion in new capital over the past 12 months, according to data from VettaFi.
Two infrastructure ETFs have been launched this month alone. Impex Asset Management converted one of its mutual funds into the Impex Global Infrastructure ETF, while alternative manager Harrison Street Asset Management launched an AI-related ETF focused on electrification.
“Securing reliable energy sources is one of the biggest obstacles to moving forward with all the AI data centers require,” said Robert Baker, chief investment strategist at Harrison Street.
Ed Farrington, president of Impex’s North America operations, said infrastructure is a way to diversify the overall equity portfolio and diversify what has been a highly concentrated business for years.
Play “Stealth” AI
To be sure, the Magnificent Seven hyperscalers have consistently delivered strong revenue, but investors say that’s largely thanks to their core businesses, which fund AI capital expenditures. That spending will be about $630 billion this year.
The quest to identify low-cost infrastructure companies set to profit is driving some investors to niche corners of the market.
Ari Sass, MD Sass Investor Services president and portfolio manager, said companies that he thought were “stealth” AI plays are moving into the spotlight, such as those that help power semiconductor fabrication plants and data centers deliver the tremendous amounts of energy needed.
Quanta Services, which provides construction and maintenance services for electric utilities, for example, is up 24.17% so far this year.
The Tortoise AI Infrastructure ETF, launched in October, meanwhile, invests in companies like century-old Wisconsin-based Modine Manufacturing, which started out manufacturing radiators for farm equipment and has since moved on to provide data center cooling systems. Its shares have gained 19.25% so far this year.
As more investors get into the AI infrastructure business, some are sounding the alarm. He points to fiber optic network companies that collapsed in the 1990s after investing heavily to support Internet companies.
“It seems that spending on AI buildout is coming from financially strong companies, but at the same time, the valuation of anything with AI exposure is getting a little richer,” said Michael Reynolds, vice president of investment strategy at Glenmede. “Everybody needs to exercise some caution.”
As a trusted and reliable news source
Add now!
(You can now subscribe to our ETMarkets WhatsApp channel)
