An analysis suggests that the investment flow centered on the 'Magnificent 7 (M7),' which represents the U.S. stock market, is gradually shifting to the 'Parabolic 7 (P7).' As competition in generative artificial intelligence (AI) services intensifies, the value of core infrastructure companies that implement AI is becoming increasingly prominent.

Until now, the M7—centered on major U.S. tech stocks such as Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla—has led the market. These companies have driven the U.S. stock market rally by securing competitiveness in various fields, including AI platforms, cloud computing, smartphones, search, and electric vehicles.

Recently, as infrastructure companies in semiconductors, servers, networks, and storage devices—the foundations of AI services—have emerged as a new growth axis, the phrase "from M7 to P7" has been used in the market. The rationale behind this is that as AI services expand, investments in data centers and semiconductors that support them are inevitably bound to increase simultaneously.

P7 Constituent Companies and Key Roles

The companies classified as P7 include Micron (MU), Sandisk, AMD, Broadcom (AVGO), Marvell Technology (MRVL), Intel (INTC), and Dell Technologies (DELL). These companies play critical roles in the process of building AI infrastructure.

Micron is positioning itself as a key player in the AI memory market by expanding the supply of high-bandwidth memory (HBM) required for AI servers. As AI models grow larger, memory demand increases, making the company expected to be a direct beneficiary.

Sandisk supplies enterprise SSDs and NAND flash storage devices, addressing the expanding storage needs of AI data centers. With the spread of generative AI causing a surge in data storage volumes, expectations for growth in the storage market are also rising.

AMD is expanding its influence in the AI semiconductor market by leveraging its AI GPUs, CPUs, and data center accelerators. In particular, it is evaluated as a company that is forging a competitive landscape in the AI chip market, which has been formed around Nvidia.

Broadcom holds strengths in custom AI semiconductors (ASICs) and data center network semiconductor sectors. As global big tech companies increasingly develop their own AI chips, ASIC demand is also expanding in tandem.

Marvell Technology supplies network and optical communication solutions responsible for ultra-high-speed data transmission within AI data centers. As the scale of AI clusters grows, the importance of high-speed interconnects is increasing, sustaining growth expectations.

Intel is simultaneously strengthening its data center processors and foundry business, serving as one axis of the AI infrastructure supply chain. The diversification of semiconductor production bases and investments in advanced processes are also cited as mid- to long-term growth factors.

Dell Technologies is a primary beneficiary of the expansion in AI server supply. As global cloud service providers and large enterprises increasingly build AI data centers, an increase in server shipments is expected.

Differences in Nature Between M7 and P7

The market evaluates that while the M7 consists of companies that provide AI services to consumers, the P7 comprises companies that build the foundation of the AI ecosystem, highlighting a difference in their nature. The analysis indicates that as AI competition deepens, investments are highly likely to expand not only in GPUs but also in memory, storage, servers, networks, and power infrastructure.

In particular, as global big tech companies continue massive capital expenditures (CapEx) to build AI data centers, expectations for earnings improvements among AI infrastructure companies are also growing. Accordingly, a trend is emerging where investors' interest is gradually expanding from the platform-centric M7 to the P7, which is responsible for AI infrastructure.

However, opinions also suggest that while P7 companies are expected to benefit from the expansion of AI infrastructure investment, it must also be considered that their earnings and stock price volatility could increase depending on the pace of data center investment, semiconductor industry conditions, and clients' facility investment plans.

[This article was written with the assistance of AI. This article is not intended to solicit investment, and the final decision and responsibility for investing lie with the investor.]