What is the "Tech Rally" and why does it matter for investors?

The "Tech Rally" refers to the recent surge in technology stock prices, particularly among mega-cap companies like the "Magnificent Seven" (Apple, Microsoft, Google, Amazon, Nvidia, Meta, and Tesla). This rally has been largely driven by optimism around artificial intelligence advancements. It matters for investors because it's creating growth opportunities not just in these large companies, but also in the smaller firms that provide the essential technology, components, and services that make AI development possible.

What are the "picks and shovels" of the AI gold rush?

This refers to the companies that provide the essential tools, components, and infrastructure needed for AI development, rather than being the end providers of AI services themselves. Just as the most reliable profits during the gold rush often went to those selling mining equipment rather than the miners themselves, these companies supply the critical hardware (semiconductors, servers), software platforms, and security solutions that enable AI advancement. They can benefit regardless of which specific AI applications ultimately succeed.

What are semiconductors and why are they important for AI?

Semiconductors are materials (typically silicon) that can conduct electricity under some conditions but not others, making them ideal for controlling electrical signals. They're used to make computer chips and processors, which are the "brains" of all computing devices. For AI development, specialized semiconductors like GPUs (Graphics Processing Units) and custom AI chips are crucial because AI requires enormous computing power for processing and analyzing massive datasets. Companies that design and manufacture these chips are foundational to the entire AI ecosystem.

What is cloud computing and how does it relate to the tech rally?

Cloud computing is the delivery of computing services over the internet ("the cloud") rather than through local servers or personal devices. These services include servers, storage, databases, software, and processing power. The tech rally is closely tied to cloud computing because AI development requires massive computing resources that are most efficiently delivered through cloud platforms. As companies race to develop AI capabilities, they're significantly increasing their spending on cloud infrastructure and services, benefiting both the major cloud providers and companies that supply technologies to build and secure cloud environments.

What is cyber security and why is it included in this stock group?

Cybersecurity involves protecting computer systems, networks, and data from digital attacks or unauthorized access. It's included in this stock group because as AI and cloud computing expand rapidly, the need for robust security increases proportionally. Companies are storing more sensitive data and running more critical operations in cloud environments, creating greater security risks. Additionally, AI systems themselves need protection from tampering or data theft. Cybersecurity companies are therefore essential partners in the AI-driven tech expansion, experiencing growing demand as the digital infrastructure expands.

17 handpicked stocks

Riding the Tech Rally

These carefully selected companies form the backbone of today's AI-driven tech boom. From semiconductors to cloud services, these stocks represent the picks and shovels powering the digital gold rush as mega-cap tech giants expand.

Han Tan | Market Analyst

Published on June 30

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

NVIDIA Corporation

NVDA

Current price

$188.95

Nvidia's GPUs are the primary engine for AI development, making it a central beneficiary and driver of the mega-cap tech rally.

Microsoft Corporation

MSFT

Current price

$517.43

While a member of the Magnificent Seven, its Azure cloud platform is a primary enabler for countless other companies developing AI solutions, benefiti...

While a member of the Magnificent Seven, its Azure cloud platform is a primary enabler for countless other companies developing AI solutions, benefiting from the ecosystem's growth.

Alphabet Inc. - Class C Shares

GOOG

Current price

$246.73

As a key driver of the rally, its Google Cloud Platform also serves as foundational infrastructure for the broader AI economy, benefiting from widespr...

As a key driver of the rally, its Google Cloud Platform also serves as foundational infrastructure for the broader AI economy, benefiting from widespread adoption.

Super Micro Computer, Inc.

SMCI

Current price

$52.49

Snowflake Inc.

SNOW

Current price

$240.54

CrowdStrike Holdings, Inc.

CRWD

Current price

$496.80

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About This Group of Stocks

Our Expert Thinking

While mega-cap tech firms grab headlines, we've identified the suppliers and enablers fueling their growth. These companies provide the critical hardware, software, and security that power AI innovation, positioning them to benefit directly from tech giants' massive spending and expansion.

What You Need to Know

This collection represents the technological infrastructure behind the AI revolution. Rather than focusing solely on the biggest names, these stocks offer exposure to specialized segments like high-performance computing, semiconductors, cloud services, and cybersecurity that form the digital backbone.

Why These Stocks

These companies were selected for their strategic position in the tech supply chain. As AI development accelerates and mega-cap tech firms increase their infrastructure investments, these specialized providers of essential components and services stand to benefit from the ripple effects.

Group Performance Snapshot

14 of 17

Stocks Rated Buy by Analysts

14 of 17 assets in this group are rated Buy by professional analysts.

13.9% vs 4%

Group Growth vs Bank interest

This group averaged a 13.9% return last month, beating the typical 4% bank rate.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🔌

Powering the AI Gold Rush

These companies provide the critical technology infrastructure that enables AI development. As tech giants pour billions into AI initiatives, these suppliers stand to benefit directly from the massive spending wave.

🌐

Beyond the Magnificent Seven

While everyone focuses on the biggest tech names, these companies represent the "hidden infrastructure" that makes their growth possible. Many investors overlook these essential players in the AI supply chain.

🚀

Riding the Mega-Cap Ripple Effect

As tech giants expand their AI capabilities, they drive demand across the entire ecosystem. These stocks are positioned to benefit from this powerful ripple effect as the tech rally continues to build momentum.

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