Key Takeaways
A German fund manager’s 61 percent portfolio gain in two months highlights a booming, under-the-radar trade: the picks and shovels of the AI gold rush.
A 24-year-old German fund manager’s reported 61 percent portfolio gain over two months by avoiding Nvidia Corp. shows that the artificial intelligence infrastructure boom is creating massive opportunities in ancillary sectors, from data storage to alternative chipmakers and electricity providers.
The strategy’s success is reflected in the performance of companies essential to the AI ecosystem. While Micron Technology has gained 90 percent in 2026, data storage provider Seagate Technology has surged 164 percent. Advanced Micro Devices Inc. saw its stock jump 14.9 percent in a single day after a strong outlook, according to a May 6 report.
Seagate has already secured supply agreements with “nearly all major cloud and hyperscale customers” for its high-capacity storage products through calendar 2027, according to its latest quarterly report. The company has also begun negotiations for contracts for 2028 and beyond, signaling sustained demand.
The investment case rests on the explosive growth of data-heavy AI applications. The AI server market is projected to grow almost sixfold between 2024 and 2030, while the global data storage market could expand from $300 billion in 2026 to nearly $985 billion by 2034, according to Fortune Business Insights. This suggests that companies providing the foundational infrastructure for AI have a long runway for growth.
Seagate’s recent performance illustrates the trend. The company’s revenue jumped 44 percent year-over-year to $3.11 billion in its latest quarter, while earnings shot up 116 percent as it capitalized on rising prices for its hard disk drives (HDDs) and solid-state drives (SSDs). Data centers, which need to store vast datasets for training AI models, accounted for 80 percent of Seagate’s revenue.
The market appears to be undervaluing this growth. Seagate’s stock trades at a price/earnings-to-growth (PEG) ratio of 0.5, according to Yahoo! Finance. A ratio below one is often considered an indicator that a stock is undervalued relative to its future earnings growth prospects.
The AI chip market is also not a monopoly. AMD is emerging as a strong challenger to Nvidia, benefiting from a market shift toward “inference,” where AI models are deployed in real-world applications. This trend is increasing demand for its server central processing units (CPUs), not just the graphics processing units (GPUs) used for training.
Reflecting this, AMD raised its forecast for the server CPU addressable market, now expecting it to grow by more than 35 percent annually through 2030, up from a prior forecast of 18 percent. While AMD trades at a higher forward earnings multiple of about 42.4 times compared to Nvidia's 24.5, at least 20 brokerages raised their price target on the stock after its latest report, with Evercore ISI setting a new high of $579.
For investors, the success of this non-Nvidia strategy shows the AI trade is maturing. While Nvidia remains a central player, the immense capital investment required for the AI buildout is creating significant opportunities in other essential companies like Seagate, AMD, and even utilities. These firms offer a way to invest in the AI revolution, sometimes at more attractive valuations, without concentrating risk in a single, high-flying name.
This article is for informational purposes only and does not constitute investment advice.
