Smaller companies are rising quickly to challenge Big Tech as AI 's best trade (www.cnbc.com)

Smaller companies are rapidly emerging as challengers to Big Tech in the AI landscape, as they capitalize on the burgeoning demand for reliable power and data center efficiency. Investors are increasingly recognizing opportunities in small- and mid-cap firms within specialized markets where competition is minimal. As artificial intelligence transforms energy markets, the focus has shifted from traditional tech sectors to areas such as nuclear power and data center management, which are pivotal for maintaining consistent operations in an AI-driven ecosystem. The drive for energy reliability under AI workloads has sparked renewed interest in nuclear power, leading to growth for companies providing ancillary services and technologies. Market analysts emphasize that while passive investment strategies capture broad trends, active management is crucial for identifying high-potential firms earlier in their journey. However, caution is necessary due to the volatility associated with some players in this space. The evolving AI power ecosystem demands strategic portfolio construction, balancing concentration risks with the need for diversification, as the sector continues to develop in significant and unexpected ways.