The Magnificent 7 stocks and bitcoin have lost momentum as investors rotate into semiconductors, memory stocks, and SpaceX-linked opportunities. Microsoft is down 33% from highs, Meta down 28%, and Tesla down 20%, while bitcoin sits about 50% below its October peak. The rotation reflects concerns over the sustainability of massive AI spending by hyperscalers. Capital is flowing into companies providing AI infrastructure, such as chipmakers and memory producers. Sandisk has surged 800% this year, Micron Technology gained 230%, and the VanEck Semiconductor ETF rose 67%. SpaceX raised $75 billion in a record IPO. Alphabet, Amazon, Microsoft, and Meta are expected to spend $725 billion on capex this year, a 77% increase, while free cash flow falls short. Borrowing by these companies hit $93 billion last year, and share repurchases dropped 33% to $132 billion. This shift highlights a growing preference for infrastructure providers over the tech giants funding the AI boom.

Key facts

• Microsoft down 33%, Meta down 28%, Tesla down 20% from highs.
• Bitcoin down ~50% from October all-time high.
• Sandisk up 800% and Micron up 230% year-to-date.
• SpaceX raised $75 billion in record IPO last week.
• Hyperscalers' combined capex expected $725B, up 77% YoY.

KeyAudit data perspective