AI stock rally sees 3 new leaders as tech rotation begins

(Reuters) – Technology stocks are pushing markets to record highs, but the leadership is starting to shift away from the big-name giants for the first time since 2022. As the artificial intelligence rally broadens, investors are rotating into the infrastructure and specialized hardware companies building the backbone of the AI industry.

“Equity markets have gradually returned to pricing on fundamentals despite recurring external geopolitical headwinds,” analysts at Guotai Haitong Securities said in a note. They noted that thematic rotation has picked up pace and risk appetite is on the mend, with a shift to domestic substitution in China’s tech sector remaining a key theme.

The tech-heavy Nasdaq has surged, but the gains are spreading. In Asia, China’s Nasdaq-style Star 50 Index rallied 3.5 percent to a three-month high, while the CSI Semiconductor Index surged 5.5 percent. In Hong Kong, the Hang Seng Tech Index was up 1.3 percent, according to a Reuters report from April 27. This comes as profits at China’s industrial firms grew at their quickest pace in six months.

The rotation suggests investors are looking for new ways to gain exposure to the AI boom, beyond the crowded trades in a few dominant players. This shift could create volatility for major indices but also presents opportunities in previously overlooked sectors that are critical to AI’s expansion.

New Leaders Emerge in AI Infrastructure

The insatiable demand for data centers driven by AI is creating a new class of winners in unexpected sectors. One such name is Brookfield Corporation (BN), a multi-asset manager focused on real estate, infrastructure, and renewable power. The company’s infrastructure and renewables segments are benefiting from secular tailwinds including AI-driven data center demand.

While Brookfield’s stock has depreciated by approximately 8.50 percent since April 2025 due to rate sensitivity and real estate headwinds, analysts see long-term value. David & Moat Investments highlights the company’s accelerating Wealth Solutions and infrastructure growth as key drivers for long-term distributable earnings. A major hidden value driver remains carried interest, with over $6 billion in unrealized gains expected to be realized over the next several years, a catalyst not fully reflected in its current valuation.

The Evolving Chip Rally

The rally is also moving deeper into the semiconductor supply chain. While Nvidia (NVDA) continues to be a dominant force, its evolution into a complete AI infrastructure provider highlights the changing landscape. The company is now positioning itself for both inference and agentic AI, showing it is more than a one-trick pony.

At the same time, other players are carving out essential niches. Amazon (AMZN) is seeing its stock regain momentum as growth from its cloud computing segment accelerates. The company’s custom chip business, a $20 billion run-rate operation, gives it a significant cost advantage in the AI race. Amazon has long had custom chips for both training and inference, a strategy now being validated by competitors.

For investors, this rotation means looking beyond the obvious names. While the Nasdaq’s giants are not going away, the next leg of the AI rally may be led by the companies building the physical and digital infrastructure that underpins the entire industry. Brookfield, trading at a forward P/E of 11.89, offers a different risk profile compared to Nvidia, which trades at a much higher multiple. This suggests that opportunities exist for those willing to look at the picks and shovels of the AI gold rush.

This article is for informational purposes only and does not constitute investment advice.