Despite trading sideways at the beginning of the session, yesterday the S&P 500 just barely eked out a new all-time closing high for the second consecutive day. This marks the longest winning streak for the benchmark index since July. The Nasdaq 100 also climbed to a new highest close, while the Russell 2000 outperformed.
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We’ve been covering the sudden sexiness of data storage as a market theme a lot recently, with Western Digital and Seagate Technology Holdings turning into top trades of 2025.
Western Digital, which has been trading at a discount to Seagate due to its spottier earnings record over the last couple years, seems to have suddenly found fans among the unwashed stock-trading masses.
Over in JPMorgan’s always informative Retail Radar note, analysts spotlighted “strong buying in WDC rally” Wednesday as traders climbed aboard a rally that has carried the shares up more than 60% over the last month.
At the heart of the turnaroundis the fact that the companies — which took a beating during the worst of the tariff-related wobbles earlier this year — have been able to show Wall Street that they would have no problemdealing with any increased costs of imports thanks to the surge of demand for data storage.
THE TAKEAWAY
The superstars of the coming onslaught of data centers will be the Nvidia chips that constitute the brains of the operation, and Nvidia shareholders have been rewarded handsomely with windfalls from that positioning. But retail traders are not sleeping on the reality that all the bytes that those Nvidia chips crunch will have to reside somewhere, and that disk will probably be built by Western Digital or Seagate.
That’s a wrap on Q3 2025 – how did your portfolio fare?
As of 9/30/2025 the Nasdaq-100® has returned 17.5% year to date, topping the S&P 500 by 3.7 percentage points, continuing a trend of outperformance by the index.
Specifically, as of 9/30/25, the Nasdaq-100 delivered a 31.0% trailing 3-year annualized return compared to 23.1% for S&P 500. Similarly, the Nasdaq-100 delivered a 16.7% trailing 5-year annualized return compared to 14.7% for S&P 500.1
From major players across the technology, healthcare, and consumer goods sectors, the index is home to some of the most dynamic companies in the world, including the Magnificent Seven.
What we already knew was that Nebius — whichrose from the ashesof Russian tech giant Yandex — will provide Microsoft “access to dedicated GPU infrastructure capacity in tranches at its new data center in Vineland, New Jersey over a five-year term.”
Citing people familiar with the matter, the report says that Nebius will utilize more than 100,000 of Nvidia’s flagship Blackwell chips in order to “provide computing power to internal teams creating large language models and a consumer AI assistant” for Microsoft.
The so-called “neocloud” cohort, of which Nebius and CoreWeave are the most prominent in the publicly traded space, effectively serves as overflow capacity for the AI boom.
The pair have been on fire amid an all-out frenzy from hyperscalers to accumulate more computing power.
Nebius’ arrangement with Microsoft will allow the tech giant to use its own compute to focus on fulfilling demand from customers.
THE TAKEAWAY
Remember that the stock market’s intermediate peak in February was accelerated by a breakdown in AI-geared momentum stocks on concerns that Microsoft might have already had too much data center capacity, which came on the heels of the DeepSeek-induced freak-out for the industry. Such worries have since been washed away by a steady wave of spending commitments from leading private and public tech giants that totalin the hundreds of billions of dollars.
Microsoft-backed OpenAI has completed a secondary share sale valuing the company at $500 billion — more than Elon Musk’s SpaceX. As we’ve written before, investors are tripping over themselves to get in on AI startups, sending valuations sky-high and making so-called “hectocorns” more commonplace. OpenAI’s valuation has soared more than 200% in just one year.
1 Annualized index returns are calculated using the following annualization formula: [ [ending value of investment/beginning value of investment]^(1/number of years)]-1. Partial year returns use the holding period return formula: [ending value of investment/beginning value of investment]-1.
Past performance is not indicative of future results. Index performance is for illustrative purposes only and does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.
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