Is the "Seven Giants" of the US stock market faltering? Wall Street now only recognizes this "hardcore" track

This year, the US stock market has had a shaky start with uncertain prospects, but one trading trend has remained strong: going long on storage chips and data storage sectors. Despite recent pullbacks, companies such as SanDisk (SNDK.US), Western Digital Corporation (WDC.US), Seagate Technology Holdings PLC (STX.US) have all been among the top performers in the 2026 S&P 500 index, continuing their strong performance from 2025. The massive investments in artificial intelligence (AI) have led to a continued surge in demand for storage chips and components in data centers, with supply unable to meet the demand. Rob Thummel, senior investment portfolio manager at Tortoise Capital, stated, "Infrastructure is the core theme now." The company's AI infrastructure ETF holds shares of Western Digital Corporation, Seagate, SanDisk, and Micron Technology, Inc. (MU.US). The strong performance of this sector contrasts sharply with the "Big Seven" stocks in the US market, which have all declined this year, with a cumulative drop of 10% in related indices. As major AI cloud providers see a sharp increase in demand for storage products, companies in this sector have strong pricing power. This implies that traditional investment logic revolving around the cyclical nature of this industry may need to be re-evaluated. Thummel pointed out that these types of stocks fit well with the current Wall Street trend of "high asset and low obsolescence" (HALO) investment. "Large tech giants are being sold off due to their poor performance, while funds are pouring into infrastructure, storage chips, and data storage sectors." Last week, leading storage chip company Micron Technology, Inc. released results that far exceeded expectations, providing strong evidence for this investment logic. The continued investment in AI is expected to make this industry cycle larger in scale and potentially longer than before. Despite doubts about companies aggressively investing in AI, companies that may face technological disruption, and even long-standing leaders like NVIDIA Corporation (NVDA.US), the storage sector remains a favored destination for capital. Jamie Zakalik, senior semiconductor industry analyst at LubaMai, said, "The storage sector is showing unprecedented growth potential and has immense pricing power. While 'security' may not be the exact term, compared to other parts of the AI industry chain, investments in these companies have higher certainty." SanDisk has been the top-performing stock in the S&P 500 for the past two years, with a gain of over 1850% since its listing in February 2025. Western Digital Corporation and Seagate both rank among the top twenty in the S&P 500 for growth. Despite concerns over its aggressive production expansion plan reflected in last week's earnings report, Micron rose 42% for the year, securing a place in the top twenty-five for growth. Compared to this, the S&P 500 has fallen 3.9% this year, the more tech-heavy Nasdaq 100 index dropping by 4.2%, while the Philadelphia Semiconductor Index only rose by 9.7%. Of course, the core reason for the increase in storage chip prices is supply shortage. This industry has always been plagued by supply-demand imbalances: rising prices lead to capacity expansion, but once demand weakens, prices can plummet. Ann Miletti, stock investment manager at Allspring Global Investments, stated, "Supply is still catching up with demand at the moment, and this contradiction will eventually be resolved. It's just a matter of time." Nevertheless, as large-scale companies continue to invest in building new data centers, investors believe this sector still has room for further growth. Zakalik said, "The logic for being bullish on storage chips is very strong right now. The AI market's demand for storage differs greatly from traditional hardware, and this demand growth is more structural. Perhaps this cycle is really different this time." NVIDIA Corporation CEO Jensen Huang's statement has further bolstered confidence. He stated last week that the company's AI chip sales are expected to surpass one trillion dollars in the coming years, indicating a continued increase in AI investment that will support long-term high demand, a significant positive for storage sector investors. Thummel of Tortoise Capital admitted, "As long as cloud providers continue to spend capital and new AI applications are implemented, the storage sector still has room for growth. Huang Renxun has pointed out the core demand of the AI industry, and storage is a key part of it."