Halfway through a year defined by turbulence, a distinct trend has surfaced within global financial markets: assets linked directly to the physical expansion of artificial intelligence have surged, while traditional investment vehicles often favored during volatile times have largely disappointed. Despite the backdrop of Mideast conflict, political instability, and rising oil prices, major stock markets across several regions managed to reach new record peaks.
Dan Coatsworth, who serves as the head of markets at AJ Bell, noted that companies benefiting from the AI investment cycle were the primary market leaders during the first half of the year. Conversely, he described Bitcoin as a “shocker” and highlighted that gold failed to maintain its upward momentum. Coatsworth emphasized that these developments represent a remarkable sequence of events for a six-month trading period.
The most impressive growth emerged from the memory chip manufacturing sector. As the demand for AI computing infrastructure outpaced supply, share prices skyrocketed. In the U.S., SanDisk recorded a gain exceeding 850% over six months, while Western Digital, Micron Technology, and Seagate Technology all tripled in value—a pace rarely seen in modern equity markets. This rally is fueled by the massive requirement for high-speed storage and memory necessary to train and operate AI systems as major tech firms compete to expand their data centers.
Other U.S. equities benefiting from the AI trend include Applied Materials, AMD, Dell, and Intel, all of which saw growth ranging between 150% and 280% year-to-date. This enthusiasm also boosted emerging markets; heavy involvement from Asian chipmakers like SK Hynix and TSMC helped the KOSPI in South Korea double in value. Meanwhile, Japan’s Nikkei 225 climbed approximately 40%, and the MSCI Emerging Markets index rose about 27%. In Europe, the FTSE 100 grew 7%, the CAC 40 in France increased 5%, and Germany’s DAX rose 2%. Conversely, the MSCI India index dropped 5% and the Hang Seng in Hong Kong declined 6%. Notably, a recent technology sell-off has begun to cool the memory chip rally.
The market environment proved difficult for some previous leaders. Former AI favorites like Microsoft and Meta faced significant setbacks, falling 24% and 14% respectively on a total-return basis. As these companies ramped up AI spending, they became more capital-intensive, leading investors to retreat from the premiums previously applied to their stocks. Microsoft is currently trading at its lowest valuation in a decade, placing it and Meta at lower valuations than McDonald’s.
Assets expected to thrive during uncertainty ultimately faltered. Gold reached a record peak of $5,594.82 per ounce on January 29, but subsequently lost approximately 28% of its value as higher cash rates and bond yields diminished its appeal compared to income-generating assets. Bitcoin performed even worse, declining 28% year-to-date as capital rotated away from crypto and toward tech equities. In the UK, takeovers provided a lift, with firms like Schroders, Glencore, and Segro attracting interest, though housebuilders such as Persimmon lagged due to a slow property market. Meanwhile, the defense sector, a strong performer in 2025, saw declines for companies like BAE Systems, Palantir, and Rheinmetall as military budget growth became fully priced into the market.
