The AI Stack - A Trader’s Map
I benchmarked 81 AI names against SMH, the semiconductor ETF. NVIDIA and Broadcom aren’t leading. Here’s what is.
I built a watchlist of the AI stocks - broken into layers from power and grid at the bottom to software and applications at the top - and then ran it through our relative-strength rotation framework.
I measure two things for each stock - RS-Trend, which tells me whether it's outperforming or underperforming the benchmark on trend, and RS-Momentum, which tells me whether that relative performance is accelerating or decelerating. That gives four quadrants: Leading (outperforming and accelerating), Weakening (outperforming but losing steam), Lagging (underperforming and getting worse), and Improving (underperforming but turning around).
For this analysis, I benchmarked against SMH (the VanEck Semiconductor ETF), not against SPY. I’ll explain why that matters in a moment.
Two of the most discussed names in the AI trade - NVIDIA and Broadcom - aren’t leading. The real strength is in other parts of the stack.
The AI trade is not one trade
Most people lump “AI stocks” into one bucket. But the AI build out has at least a dozen distinct layers, each at a different stage of the investment cycle.
I built a TradingView AI Stack Watchlist, grouped by layer. You can grab the watchlist yourself (here) if you want.
The bottom of the stack is the physical infrastructure - power, data-centre real estate, and networking. The middle is the semiconductor complex - compute silicon, foundries, equipment, memory, and analog chips. The top is cloud platforms, software, and applications. Alongside the main stack, a group of companies pivoting from crypto mining to AI compute. And at the edge, a handful of companies bringing AI inference to devices.
Why SMH and not SPY?
If I’d benchmarked this universe against SPY, nearly everything would show up as “Leading” because most AI names are outperforming the SPY. Benchmarking against SMH asks a much harder question: which AI names are outperforming the already-strong semiconductor complex?
So let’s dive into where the strength within AI is concentrated.
Interconnect - the leading layer
One sub-theme that stands out is networking and optical interconnect - the companies that connect GPUs inside data centres. Nearly every interconnect name in the watchlist is confirmed Leading versus SMH.
Credo Technology (CRDO) has the highest RS-Momentum of all 81 stocks currently. It had a nearly 60% drawdown between December 2025 and the end of March 2026, but has recovered extremely strongly since. It still sits below its all-time highs, but if it can form a handle or tighten up here under the ATHs, allowing the 20 and 50-day SMAs to catch up to price and cross above the 200-day SMA, it might allow a good entry in the future. One to watch.
Credo Technology (CRDO) Chart
On all the daily charts the black line is the 20-day SMA, the green is the 50-day SMA, and the red is the 200-day SMA.
Corning (GLW) held its 50-day SMA throughout the entire March pullback.
Corning (GLW) Chart
Fabrinet (FN), Coherent (COHR) and Ciena (CIEN) are all in the Leading quadrant, with clean uptrends (particularly CIEN, which has held its 50 SMA on all pullbacks for many months). Lumentum (LITE) has fallen from the Leading to Weakening quadrant, but has been trending nicely for 10 months, holding its 50 SMA on all pullbacks.
Fabrinet (FN) Chart
Coherent (COHR) Chart
Ciena (CIEN) Chart
Lumentum (LITE) Chart
NVIDIA and Broadcom - only keeping pace
NVIDIA (NVDA) and Broadcom (AVGO) barely scrape into the Improving quadrant. But are worth watching because if they tighten up here under their all-time highs, may provide a fresh entry on a breakout.
NVIDIA (NVDA) Chart
Broadcom (AVGO) Chart
Power and grid - sharply split
The market is clearly differentiating within this layer. Data-centre-specific power and cooling names are Leading versus SMH. Broader utilities and generators are Lagging.
Bloom Energy (BE) is Leading versus SMH, up 141% year-to-date. Fuel cells for data-centre power.
Bloom Energy (BE)
Vertiv (VRT) is Leading, up 85% year-to-date.
Vertiv (VRT) Chart
On the other side, Constellation Energy (CEG) is Lagging versus SMH - down nearly 20% year-to-date. The nuclear-for-data-centres narrative has stalled. Vistra (VST) and NRG are also Lagging.
Specialty foundries are outperforming TSMC
TSMC (TSM) is Lagging versus SMH.
Tower Semiconductor (TSEM) is Leading - up over 86% year-to-date. It’s a specialty foundry focused on analog, RF, power management, and silicon photonics. GlobalFoundries (GFS) is also Leading - up 65% year-to-date, after experiencing a large decline during 2024-25.
Tower Semiconductor (TSEM) Chart
AI doesn’t just need cutting-edge 3nm GPU dies. It also needs the analog, power, and photonic chips that make the whole system work, and those are manufactured on different process nodes by different foundries.
One thing worth noting - GlobalFoundries filed a patent lawsuit against Tower Semiconductor in late March 2026. Both stocks are performing well despite that, but it’s a headline risk worth being aware of.
The crypto-miner pivot is real
Several former Bitcoin miners are repurposing their data-centre infrastructure - power contracts, sites, cooling - to sell GPU compute to AI companies.
Hut 8 (HUT) has the highest RS-Momentum in the group and is up 65% year-to-date. It’s approaching its November 2021 all-time high. If it can consolidate here for a while, a breakout could provide a fresh entry.
Hut 8 (HUT) Chart
TeraWulf (WULF) is Leading with a 75% year-to-date gain and recently broke out of a 6-month or so consolidation.
TeraWulf (WULF) Chart
Systems integration - quietly leading
Celestica (CLS), Dell (DELL), and Jabil (JBL) - the companies that turn chips into deployable racks and clusters - are all Leading versus SMH. They’re outperforming the chipmakers themselves.
CLS is extended here but worth watching for a retest of the breakout zone or if it can start trending cleanly above its 20 and 50 day SMAs again.
Celestica (CLS) Chart
Semi equipment is decelerating
Lam Research (LRCX), Applied Materials (AMAT), KLA (KLAC), and Teradyne (TER) are all in the Weakening quadrant. High RS-Trend but fading momentum.
Software is absent
Almost every software and applications name in the watchlist is Lagging versus SMH. Palantir, Snowflake, Salesforce, ServiceNow, Adobe, IBM - all underperformers. The market is rewarding the infrastructure buildout, not the companies consuming it.
The takeaway
The strength is concentrated in interconnect, specialty foundries, data-centre-specific power and cooling, the miner-to-AI pivot, and systems integration. Nothing is really actionable now, as almost everything showing leadership is extended. This is a good shopping list though. Be mindful that most of these stocks have very high ATRs, so position size and set stops accordingly on any entries.
Stay open minded to all possibilities and manage risk tightly.
Cheers,
Marcus Grant, CFTe
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