AI boom powers chips, storage, and lab-tech deals

AI buildout fuels chips, storage and infrastructure

Artificial intelligence workloads are driving a new wave of spending across semiconductors, data centers and storage, reshaping returns for several corners of the tech market. Memory and storage providers were among the S&P 500’s strongest performers in 2025, while equipment vendors and AI-focused funds are entering 2026 with continued momentum as demand for compute and storage capacity spills into power, racks and supporting infrastructure.

Four storage and memory manufacturers – Sandisk, Western Digital, Seagate Technology and Micron Technology – all posted gains above 200% in 2025. Sandisk, which makes NAND flash-based data storage devices, surged 559% and was the best-performing stock in the index. Western Digital, focused on hard drives, rose 282%, Seagate gained 219%, and Micron, a supplier of DRAM and NAND for data centers and devices, climbed 239%.

Those gains reflected an “unprecedented, persistent memory chip shortage,” with demand from AI workloads materially outpacing supply. DRAM prices rose 170% in 2025, while NAND prices climbed almost 250% from early 2025 through December. AI applications require far more memory than consumer PCs and smartphones, tightening supply for data-center grade devices and supporting higher pricing.

Storage rally extends into 2026

The supply-demand imbalance in memory has continued into early 2026. DRAM prices are expected to rise 50% or more in the current quarter versus the fourth quarter of 2025, according to the cited analysis. The same four memory stocks have already extended last year’s rally: at the time of writing, Sandisk is up 63% year to date, Western Digital 23%, Seagate 16% and Micron 19%, while the S&P 500 has gained less than 2%.

The underlying driver remains the “frenetic AI buildout,” which is increasing demand for both performance memory and bulk storage in data centers. The articles note that market dynamics are ultimately cyclical as manufacturers add capacity, but emphasize that, for now, high prices and constrained supply continue to support elevated revenue and earnings expectations across the storage segment.

Lam Research outlook improves with memory spending

Improving conditions in the broader semiconductor industry are also feeding into equipment suppliers. Lam Research, a global provider of wafer fabrication equipment and services, has seen analysts raise price targets on expectations of higher capital expenditure and memory investment linked to AI processors. Goldman Sachs lifted its Lam target from $160 to $180 on Jan. 9, maintaining a Buy rating and citing substantial demand from AI chips and anticipated increases in DRAM and NAND spending.

Mizuho on the same day raised its Lam Research target from $200 to $220 and kept an Outperform rating as part of its 2026 capital equipment and semiconductor outlook. The firm expects further, though more moderate, growth in 2026, and highlighted preferences for AI accelerators, wafer manufacturing equipment, optical and memory sectors over areas such as electric vehicles, autos, analog chips, computers and phones.

Thermo Fisher and NVIDIA tie AI to lab workflows

AI is also moving deeper into life sciences infrastructure. On Jan. 12, Thermo Fisher Scientific and NVIDIA announced a strategic partnership to integrate advanced AI into laboratory workflows. The companies plan to build “lab-in-the-loop” solutions that connect instruments and data to AI software at scale, using NVIDIA’s DGX Spark supercomputer and BioNeMo models.

According to Thermo Fisher, the collaboration aims to modernize tasks such as experiment planning and data processing, accelerate pharmaceutical discovery, improve research accuracy and boost operational efficiency. Executive vice president Gianluca Pettiti described the effort as a “trinity of AI, agents, and instruments” that is changing scientific workflows. Thermo Fisher, a major supplier of life sciences tools and analytical equipment, is thus positioning its hardware alongside NVIDIA’s AI infrastructure for biopharma, healthcare and academic customers.

Separately, Stifel analyst Daniel Arias on Jan. 9 maintained a Buy rating on Thermo Fisher shares and raised his price target from $583 to $700. He cited expectations for a “solid year” with organic growth returning to mid-single digits and pointed to a predicted biopharma industry rebound and strong single-digit earnings-per-share growth as key supports for the outlook.

AI-focused ETF and chip names ride the theme

Broader vehicles tied to AI are also benefiting from these trends. The Global X Artificial Intelligence and Technology ETF (AIQ), which holds a diversified basket of 86 AI-related stocks, gained 32% in 2025 and tracked ahead of the Nasdaq Composite for most of the year. The fund is heavily weighted to information technology, with 72% of assets in the sector, and has notable exposure to international chip and platform leaders including Samsung, Taiwan Semiconductor and Alibaba, alongside U.S. names such as Alphabet and AMD.

AIQ’s concentration in major memory producers Samsung, Micron and SK Hynix contributed to its performance, as all three had strong years and were described as looking poised for further gains. The ETF, which seeks to track the Indxx Artificial Intelligence & Big Data Index, has started 2026 positively as well, rising about 3% through Jan. 16. The coverage notes that, despite last year’s advance, many of its top holdings still trade at what are characterized as reasonable valuations, and that AI-related stocks broadly “appear to be in a strong position” entering 2026.