The first half of 2026 has delivered a stark divide in global markets: companies building the physical backbone of artificial intelligence soared, while traditional safe havens like gold and Bitcoin stumbled. The pattern emerged against a backdrop of war in the Middle East, political upheaval, and an oil-price spike, yet several stock markets still hit record highs.
According to Dan Coatsworth, head of markets at AJ Bell, the standout investments were those on the receiving end of the AI spending boom. Bitcoin, he noted, proved "a shocker," and gold lost its luster. It is, Coatsworth observed, a remarkable run for only half a year's trading.
The Memory Chip Rally
The most spectacular gains came from an unglamorous corner of technology: memory chip manufacturers. As demand for AI computing collided with tight supply, prices surged. SanDisk led the US market with a gain of over 850% in six months, while Western Digital, Micron Technology, and Seagate Technology all more than tripled in value—a pace of return that would ordinarily take years.
The driver is the vast quantity of high-speed memory and storage needed to train and run AI systems as the largest technology companies race to expand their data centres. Other US equities that soared include Intel, Dell, Advanced Micro Devices (AMD), and Applied Materials, which rose between 150% and 280% year to date.
The rally lifted emerging markets, where Asian chipmakers such as TSMC and SK Hynix carry heavy weight. South Korea's KOSPI doubled, Japan's Nikkei 225 climbed roughly 40%, and the MSCI Emerging Markets index rose by around 27%.
In Europe, the FTSE 100 gained 7%, France's CAC 40 rose 5%, and Germany's DAX added 2%. Meanwhile, the MSCI India index fell 5%, and Hong Kong's Hang Seng lost 6%. Notably, the memory rally has begun to unwind in recent days, with several of the same names caught in a sharp technology sell-off.
The Fallen Favourites
The flipside was brutal for yesterday's winners. Previous AI darlings Meta and Microsoft were left behind, down 14% and 24% respectively on a total-return basis. Heavy AI spending turned these technology giants into more capital-hungry businesses, and investors stopped paying a premium for them. Microsoft now trades at its cheapest level in a decade, leaving both it and Meta valued more modestly than McDonald's—an outcome few would have predicted at the height of the "Magnificent 7" craze.
Gold took investors on a volatile ride. After surging to a record high of $5,594.82 an ounce on 29 January, the precious metal lost around 28% from its peak despite geopolitical turmoil that would normally send investors flocking to safe-haven assets. Its appeal was undermined by higher bond yields and cash rates, which offer an income that a gold bar cannot.
Bitcoin fared worse still, falling 28% since the start of the year as enthusiasm for crypto drained away and money rotated towards technology shares instead.
Takeovers and Cooling Trades
In the UK, takeovers did much of the heavy lifting. Six FTSE 100 companies, among them Glencore, Schroders, and Segro, attracted bid interest in the first half, a sign that buyers still see value in British blue chips even after a three-year re-rating. Housebuilders such as Persimmon struggled against a sluggish property market, while tech-adjacent names like Experian and RELX were swept up in fears about AI disruption.
One trade that conspicuously cooled was defence. The sector, which had rallied sharply after Russia's invasion of Ukraine, saw its momentum fade as investors rotated into AI-related plays. For European investors, the divergence underscores the importance of understanding which industries are truly benefiting from the AI build-out—and which are being left behind.
As the second half of 2026 begins, the question is whether the memory chip rally can sustain its momentum or whether the recent sell-off signals a broader correction. For now, the first half has made one thing clear: the AI infrastructure boom is reshaping markets in ways that few anticipated.
