Tech Giants Bet Big on AI Infrastructure: Market Recovery Drivers

Published Date : 09/06/2025 

Shares of companies providing infrastructure for artificial intelligence (AI) have rebounded, driven by increased spending from major tech firms. This recovery is restoring investor confidence in the sector, despite earlier concerns over competition and global trade issues. 

Shares of companies that provide infrastructure for artificial intelligence (AI) development have made a strong comeback from a significant drop earlier this year. This recovery is largely attributed to the substantial spending by major tech companies, which has restored investor confidence in the sector, according to Bloomberg.

Goldman Sachs Group tracked two baskets of stocks related to AI infrastructure. One basket, which includes AI data centres and electrical equipment stocks, saw a 52 per cent increase, while another, focusing on companies that supply power for data centres, rose by 39 per cent. Both indices have recovered from their April lows.

Individual companies in these baskets have also performed exceptionally well. Vertiv Holdings Co, for instance, has gained 94 per cent since April 4, and Constellation Energy Corp has seen a 75 per cent increase over the same period.

Tech Giants Boost Spending on AI Infrastructure

The world's largest technology companies, including Amazon, Alphabet, Microsoft, and Meta, are continuing to invest heavily in artificial intelligence. This ongoing spending has alleviated concerns about whether these investments would continue to flow to the firms that are crucial for AI infrastructure, as reported by Bloomberg.

Forecasts for capital expenditures to support AI demand have increased by 16 per cent since the beginning of the year, according to Bloomberg Intelligence’s Robert Schiffman. Dave Mazza, CEO of Roundhill Financial, told Bloomberg, “Earnings season reminded investors that generative-AI doesn’t run on buzzwords — it runs on concrete, copper, and gigawatts.”

What Led to the Upturn in AI Infrastructure?

The resurgence in shares of AI infrastructure companies is driven by the business potential of artificial intelligence, which has sparked a significant spending spree on data centres. This spending is essential for the development of AI programs like OpenAI's ChatGPT and Anthropic’s Claude, as reported by Bloomberg.

However, the strong start in 2025 was marred by concerns over competition from China’s DeepSeek startup and broader uncertainty over global trade. These worries, combined with fears that tech giants like Microsoft were pulling back from data centre projects, led to a selloff in the sector.

Investor Sentiment Revived

Investor sentiment improved when President Donald Trump announced a pause on most of the tariffs he had implemented in early April. This move fueled a rally that pushed the S&P 500 Index near an all-time high hit in February, according to Bloomberg data.

Another factor contributing to the revival of investor confidence was the latest earnings season. Big tech companies, such as Meta, indicated they were continuing to invest in AI development. Meta affirmed that the hundreds of billions in AI spending it had previously announced were still on track, as reported by Bloomberg.

The Bottom Line

Recent corporate deals also suggest that spending on AI infrastructure remains robust. For example, Amazon plans to invest $10 billion in North Carolina to expand its data centre infrastructure to support AI and cloud computing technologies, reported Bloomberg.

However, investor confidence in AI could be shaken if the trade war heats up again, leading to concerns that a downturn in global economic growth will result in companies cutting AI spending. Max Gokhman, Deputy Chief Investment Officer at Franklin Templeton Investment Solutions, told Bloomberg, “If the economy falls into a recession, margins will be under pressure, companies will be forced to lay off workers, and cut spending on AI.” 

Frequently Asked Questions (FAQS): 

Q: What are the main factors driving the recovery in AI infrastructure stocks?

A: The main factors driving the recovery include increased spending by major tech companies like Amazon, Alphabet, Microsoft, and Meta, as well as improved investor sentiment following the pause of tariffs and strong earnings reports.

Q: Which companies have seen significant gains in their stock prices?

A: Companies like Vertiv Holdings Co and Constellation Energy Corp have seen significant gains, with Vertiv Holdings Co gaining 94 per cent and Constellation Energy Corp gaining 75 per cent since April 4.

Q: What are the concerns that could impact investor confidence in AI infrastructure?

A: Concerns over a potential trade war, global economic downturn, and the possibility of companies cutting AI spending due to economic pressures are the main factors that could impact investor confidence.

Q: How much has the forecast for capital expenditures in AI infrastructure increased?

A: The forecast for capital expenditures to support AI demand has increased by 16 per cent since the beginning of the year, according to Bloomberg Intelligence’s Robert Schiffman.

Q: What is Amazon's plan for AI infrastructure investment?

A: Amazon plans to invest $10 billion in North Carolina to expand its data centre infrastructure to support AI and cloud computing technologies. 

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