Here's a simple way to think about what's happening in the markets right now: the story is changing. According to Travis Prentice, CIO of The Informed Momentum Company, we're not just seeing a regular rotation or a temporary trend. We're witnessing major structural shifts that are redrawing the map of what wins and what doesn't.
The two big forces at play? The accelerating build-out of artificial intelligence and a global move away from far-flung supply chains toward something called "near-shoring." Prentice told CNBC on Thursday that these are "seismic shifts" powering the market.
Let's break that down. The AI trend, he says, is entering a "disruption phase." And while software was "ground zero" for the initial impact, the momentum is now shifting. It's moving from the realm of code and algorithms to the physical world where the AI infrastructure is actually being built. Think less about the app and more about the factory that makes the chips that power the app.
From Software to Screwdrivers: The Hardware Takeover
This is why you're seeing strength in areas that might have seemed a bit old-school during the pure software boom. Prentice points directly to memory and semiconductor stocks like Micron Technology Inc. (MU), Sandisk Corp. (SNDK), and Western Digital Corp. (WDC). It's not just the chipmakers themselves, but also the companies that make the equipment to build those chips—the semiconductor capital equipment firms.
But it doesn't stop at the tech hardware aisle. This AI data center build-out is a massive industrial project. It needs power, raw materials, and heavy machinery. That's why utilities, materials, energy, and industrials are getting a lift too. The trend is creating broader market participation, but it's also widening the gap between the companies that are part of this new build-out and those that aren't.
The Widening Gap: A Market Telling a New Story
You can see this divergence in the numbers. Prentice highlights a performance gap of roughly 700 basis points between the Russell 2000 and the S&P 500. There's also an 800-basis-point gap between large-cap value and growth stocks. That's not noise; that's the market telling you a new story.
This reflects rising momentum in sectors adjacent to the AI boom—energy, utilities, engineering, and construction—as both the AI infrastructure wave and the nearshoring trend drive demand across a wider set of industries. It's a shift from a narrow, software-centric rally to a broader, more physically grounded one.
Price Action: Reflecting this underlying sentiment, SanDisk shares were up 0.54% at $926.00, Western Digital shares were up 0.59% at $374.72 and Micron Technology shares were up 0.03% at $455.21 during premarket trading on Monday, according to market data.
