The AI infrastructure trade surges higher. How to trade it from here.

Today’s issue in preview:

• The AI infrastructure trade surges higher. How to trade it from here.

• Here’s why silver could resume its explosive uptrend

• Money is pouring into this beneficiary of AI and robotics. Are you positioned to get your share of it?

The AI infrastructure trade surges higher. How to trade it from here.

Credit: Petrovich9

Right now, you can make money in stocks faster than ever before.

This is one of the foundational beliefs that guides my trading and work at Money & Megatrends.

Stocks of all kinds are moving much faster than they used to, thanks to the fusion of three modern-day phenomena.

First, technological progress – especially in AI – is advancing at an incredible rate each year. This is creating new industries and changing existing ones at the fastest rate in history.

Second, thanks to the internet and social media, market information gets disseminated globally at light speed.

And finally, AI-powered trading programs and smartphone apps allow hedge funds and individuals to execute rapid trades from anywhere.

Add those up, and you get a stock market that moves much, much faster than it did 20 years ago. Stocks are soaring and crashing at incredible speeds now. Blink, and you can miss out on a massive wealth-creating trend.

The latest example of this phenomenon is the extraordinary boom in optical networking stocks. Yesterday, leading optical networking firms Lumentum (LITE) and Coherent (COHR) surged more than 12% to reach all-time highs. Optical networking materials leader AXT Inc. (AXTI) surged to a new high as well.

Back in April, we covered the bull case for optical networking and how this theme recovered strongly after the broad market’s Epic Fury-induced selloff. In January, we covered the bull case for optical networking materials supplier AXT Inc.

Optical networking stocks are on the receiving end of the largest collective investment effort ever.

Given AI’s enormous promise, big tech firms Meta (META), Google (GOOG), Amazon (AMZN), OpenAI, and Microsoft (MSFT) are racing to build the world’s best AI models and infrastructure. They’ve already spent more than a trillion dollars. This year, they are on pace to spend over $700 billion on AI infrastructure, with more than $3 trillion expected to follow. A lot of this money is flowing into optical networking equipment.

Optical networking equipment is a critical ingredient of the AI infrastructure boom. This equipment allows data to be transferred quickly and efficiently between parts of AI computing chains. Think of optical networking as a critical part of the “AI data traffic highway system.”

As a result of Big Tech’s enormous AI infrastructure spending, optical network equipment makers Lumentum and Coherent have enjoyed soaring revenues, and their stocks are among the market’s biggest winners over the past two years.

However, the Operation Epic Fury-induced broad market correction hit these “highflyers” very hard. They fell 10%-22% from their highs.

As you can see in the Lumentum chart below, the Epic Fury selloff was short-lived. On April 2, the stock climbed 8.1% to reach a new all-time high. Over the past five weeks, the stock has built on this strength and climbed an additional 37%. The stock is up 1,522% over the past year.

AXT is also delivering extraordinary returns. The stock is up 168% over the past two months and is up 453% since our January note.

In other words, it’s good to be on the receiving end of the largest collective investment effort of all-time.

Since the optical networking theme is up so much over the past month, we don’t recommend putting new money into these stocks. Right now, power management semiconductors look like the better buy. But optical networking’s huge run is more confirmation that being long AI infrastructure is the right place to be in 2026.

Money is pouring into this beneficiary of AI and robotics. Are you positioned to get your share of it?

Credit: da-kuk

This week, two of the world’s largest lithium miners, Albemarle (ALB) and SQM (SQM), broke out to new all-time highs, making our recommendation to invest in the Battery Tech megatrend a solid winner.

Regular readers know that Battery Tech is one of our highest conviction long-term investment themes.

According to the International Energy Agency, more than 17 million electric vehicles were sold globally in 2024 – a 25% increase over the previous year.

If you think 17 million units is a lot, let’s talk smartphones. More than 1.2 billion smartphones were sold in 2024, according to IDC.

Plus, battery use isn’t limited to EVs and phones. Each year, the world deploys more battery-powered medical devices, drones, tablets, robots, bikes, and solar power systems. Given their pervasiveness, improvements in battery technology benefit dozens of other technologies.

Over the next decade, demand for battery technology will be extraordinary.

As AI enhances the functionality of cars, robots, devices, and a thousand other things, they will become increasingly autonomous. These devices won’t be worth much if they must be plugged into the wall all the time. They must be mobile… and they must have high-tech batteries that can run power-hungry AI applications.

Device makers of all kinds have a permanent, urgent need for batteries to become cheaper, smaller, and more powerful.

According to Grand View Research, the global battery market was estimated at $134.6 billion in 2024 and is projected to reach $330 billion by 2030.

In December, we highlighted high-tech battery firms Solid Power (SLDP), Amprius Technologies (AMPX), QuantumScape (QS), EnerSys (ENS), and Enovix (ENVX) as ways to invest in this theme. In April, we highlighted lithium mining stocks such as Albemarle and SQM as beneficiaries of the Battery Tech boom.

Lithium is a preferred material for high-tech batteries. It’s the lightest material on the periodic table, giving it the best energy-to-weight ratio, an important factor for portable electronics and electric vehicles. It also has very good electrochemical potential, meaning it can generate a greater voltage difference between electrodes than most other metals, resulting in more powerful cells.

All these properties make lithium a key ingredient in EVs and many other rechargeable devices, such as phones, laptops, tablets, and beyond.

Beyond EVs, the demand for lithium batteries is also broader than many people realize. Medical devices, drones, robots, and solar power systems all run on rechargeable batteries. And the installed base of each of those is growing every year. But perhaps the most underappreciated demand driver right now is Battery Energy Storage Systems (BESS).

Think of BESS as a large-scale rechargeable battery. It stores excess electricity generated by solar panels or wind farms and releases it back to the grid when it is needed the most. As the world builds more renewable energy infrastructure, the need for storage alongside it grows as well. You can’t run a grid on solar and wind alone without somewhere to draw the energy from when the sun isn’t shining, and the wind isn’t blowing. That’s where BESS comes in. McKinsey estimates BESS capacity to grow between 2-2.5x over the next 4 years.

Simply put, the advancements in battery technology are extremely bullish for lithium demand. The best confirmation of this thesis came from ALB’s recent earnings report. The company reported earnings last week, and the stock surged more than 10%. Earnings per share came in at $2.95, which crushed Wall Street estimates of $1.19. Revenue came in at $1.4 billion, up 33% from last year. EBITDA came in at $664 million, up 148% from last year.

More important than what we think of lithium miners is what the market thinks of them. As you can see in the ALB chart below, this facet of the Battery Tech trade is market-approved. ALB is up 50% year-to-date and up 273% over the past 12 months. Fellow miner SQM is in a similar uptrend.

Batteries are a critical component of devices and vehicles, and demand will soar in our new AI-powered world. This makes well-positioned battery manufacturers and battery metal producers downstream beneficiaries of the AI and robotics boom.

Here’s why silver could resume its explosive uptrend

Credit: marrio31

Yesterday, the iShares Silver ETF (SLV) broke out of a sideways consolidation pattern to reach its highest point in seven weeks. The Global X Silver Miners ETF (SIL) staged a similar breakout.

This is evidence that the bullish silver stance we took on April 23 is off to a good start.

I’ve been long and bullish silver for many years. I believed the precious metals would rise due to U.S. dollar debasement… while also enjoying a high-tech tailwind.

Most people don’t realize this, but silver has the highest electrical and thermal conductivity of any metal. This makes it a critical component in AI infrastructure and other electrical systems. In small, densely packed areas like AI servers, heat dissipation is critical.

Silver was one of the world’s top trends in 2025, returning about 145%. Since going on that huge run that peaked around $121 per ounce in January, silver has corrected and traded in a sideways consolidation range.

The uptrend that started in 2025 will likely continue.

As we covered in our Feb. 19, 2026, piece on Edge Computing, AI is moving towards “the edge.” AI will increasingly be run on local devices such as phones, cars, homes, robots, jets, boats, satellites, and spacecraft.

This is the foundation behind the long-term thesis on edge AI, autonomous systems, humanoid robots, and physical AI. These systems don’t just demand more electrical performance – they demand better electrical performance within increasingly tight thermal and power constraints. Every watt matters. Every degree of heat matters.

The infrastructure that enables this level of efficiency spans connectors, switches, relays, semiconductor packaging, and thermal management components – the bottlenecks that we have spoken about regularly here at Money & Megatrends. And silver is present in every single one of those critical infrastructure pieces.

To put this into perspective…analysts estimate that if just 10% of new global data centers integrate silver-enhanced components into their power and cooling systems, industrial silver demand could rise by 10% over the next decade.

As with most metals today, there’s a supply-side layer to this bullish scenario. The 2025 World Silver Survey reported a structural deficit of 148.9 million ounces in 2024, with cumulative deficits since 2021 now around 680 million ounces. The market has been running short on silver for years. And it’s only getting worse.

More concerning is that roughly 80% of the world’s silver is mined as a byproduct of extracting base metals like lead, zinc, and copper. Even if demand pushes silver prices significantly higher, miners simply can’t just turn on more silver production. Their output is dictated by the production economics of the primary metals in that mine. The market cannot drill its way out of a silver shortage.

There are some straightforward ways to play this theme. The simplest entry point is through an ETF. SLV is the largest physically backed silver ETF, with over $40 billion in assets — it tracks the silver price directly.

For miners specifically, the SIL holds a diversified portfolio of about 40 silver mining companies and has $5.7 billion in assets. If you want a combination of both physical silver and miner exposure in one vehicle, the Sprott Silver Miners & Physical Silver ETF (SLVR) is an expression of that.

For those who prefer individual stocks, three compelling pure-play silver miners are Pan American Silver (PAAS) – the world’s largest silver-focused producer with 10 mines across the Americas and $1.3 billion in cash; First Majestic Silver (AG) – the highest-purity silver producer in the industry with 58% of revenue coming directly from silver; and Hecla Mining (HL) – the largest silver producer in the US and Canada with 100% North American operations, insulating it from the geopolitical risk that affects most of its peers.

Another higher risk, higher reward silver bet includes Contango Silver & Gold (CTGO). Contango is a $290 million company that focuses on gold and silver exploration and development in Alaska and British Columbia. It is predominantly a gold company, generating cash flows from a mine it owns with mining giant Kinross Gold. However, the big upside for CTGO comes from its recent merger with Dolly Varden Silver, meaning CTGO now operates one of the largest undeveloped high-grade silver resources in Western Canada. A mine decision is targeted for 2029, which makes this a longer-term play with high risk, but with high potential upside.

When investors talk about the physical components of the AI infrastructure boom, semiconductor chips dominate the discussion. But as we’ve detailed, silver is an under-the-radar asset poised to enjoy rising demand. We are still long silver.

Market Notes

• The power management semiconductor theme we’ve highlighted is generating returns. Power management leader Texas Instruments (TXN) reached a new one-year high this week.

• The solar energy stock trend we’ve recommended many times continues to generate returns. The Invesco Solar ETF (TAN) advanced to new one-year highs this week.

• Over the past year, we’ve repeatedly urged readers to stay long the space industry theme. This recommendation is paying off. Leading rocket launch firm Rocket Lab (RKLB) reached a new all-time high today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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