Semiconductor companies are poised to become the biggest cash generators of the artificial intelligence boom, while the technology giants spending on AI infrastructure are expected to burn through record amounts of capital.

Cash Flow Shift

ETFs in Focus

SMH and SOXX have gained 63.68% and 85.32%, respectively, year to date, and returned 114.16% and 138.42% over the past year.

SOXL has gained 306.99% year-to-date and 625.51% over the past year.

QQQ has returned 18.33% year-to-date and 30.44% over the past year, while VGT has returned 24.95% and 40.91%, year-to-date and over the past year, respectively.

AI Investment Is Driving The Shift

The shift reflects a surge in AI-related capital spending, with these hyperscalers projected to invest about $1.8 trillion in AI infrastructure over 2026 and 2027.

Investors have increasingly rewarded companies supplying AI infrastructure while penalizing the technology giants spending heavily to build it, as questions persist over when those investments will begin generating returns.

In June, Goldman Sachs said the industry’s accelerating capital expenditures would put pressure on profitability metrics as depreciation costs rise.

Benzinga edge rankings indicate NVDA has a Momentum score in the 68th percentile and a Growth score in the 98th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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