A top fund manager unpacks why he's sticking with AI infrastructure stocks, and flags 2 lesser-known names he's betting on

Brandon Nelson, manager of the Calamos Timpani Small Cap Growth Fund (CTSIX), which has outperformed 99% of similar funds over three years, said he is not ready to sell AI infrastructure stocks despite recent volatility. Nelson highlighted Sterling Infrastructure and SiTime as two lesser-known AI infrastructure names he continues to bet on, citing strong fundamental momentum in the sector.

A top fund manager unpacks why he's sticking with AI infrastructure stocks, and flags 2 lesser-known names he's betting on Business Insider https://www.businessinsider.com Brandon Nelson of Calamos Investments says he's not among the "doomers" who see the end of the market's AI infrastructure trade. - Brandon Nelson's CTSIX fund has outperformed 99% of similar funds, per Morningstar. - Nelson said it's not yet time to dump AI infrastructure names. - He highlighted two stocks he continues to bet on: Sterling Infrastructure and SiTime. Brandon Nelson knows when to buy a stock https://www.businessinsider.com/personal-finance/investing/how-to-buy-stock . The Calamos Timpani Small Cap Growth Fund Class CTSIX https://markets.businessinsider.com/funds/calamos-timpani-small-growth-fund-class-i-us1281203919 , which he's managed since 2011, is up 52% over the last 12 months, and has beaten 99% of small-cap growth funds over the last three years, according to Morningstar data. However, perhaps even more crucial to his success, he says, is that he knows when to sell a stock. In an interview with Business Insider last week, Nelson said that of all the stocks he's sold since inception, the median return over the following 12 months has been -12% relative to the fund's benchmark /glossary/benchmark index, the Russell 2000 Growth Index. "We strongly believe that the biggest mistake that investors make is they sell their winners too soon and they keep their losers too long," Nelson said, adding: "We try to do the opposite." Given that Nelson's recent outperformance has been due in large part to companies tied to the AI buildout; given all the concerns lately around their relying on hyperscaler capex; and given Nelson's knack for getting out of sinking ship, he was the perfect person to ask the question on many investors minds right now: Is it time to dump AI infrastructure names https://www.businessinsider.com/ai-chip-stocks-memory-hardware-sell-off-where-to-invest-2026-7 ? The trade has been red-hot for most of this year, with the iShares Semiconductor ETF SOXX up 72%. But since June 22, it's down 16%, thanks to fears that hyperscalers could start to pull back on spending as investors grow impatient to see a tangible return on all of the capex. One of the biggest questions in markets right now is whether the latest volatility is the beginning of a larger sell-off in chip makers, memory firms, and other AI hardware names. To Nelson, the answer is no. He still sees upside for the trade, and said that the companies he's invested in haven't yet shown signs of an earnings slowdown. When he invests in a company, he looks for growing firms that can manage investors' expectations, setting them up to consistently beat earnings. When that happens, investors grow increasingly willing to pay a higher valuation premium on the stock, he said, which leads to price upside through multiple expansion. Then comes the skill of knowing when to sell. For Nelson, this comes down to watching for "fatigue" in the company's fundamental momentum. Are earnings not beating expectations as strongly as they once were? Are profit margins shrinking? Then it's time to get out. For now, at least, Nelson hasn't seen such fatigue in the AI capex beneficiaries he invests in. "We've seen the price momentum pull back, and there's a lot of doomers out there that think that's the beginning of the end," he said. "I'm not sure I'm there yet." He added: "The fundamental momentum of most of those AI infrastructure names is still very strong." 2 AI infrastructure stocks to watch Nelson shared two AI infrastructure names he continues to bet on. This first is Sterling Infrastructure STRL https://markets.businessinsider.com/stocks/strl-stock , which prepares areas for data center buildouts. "Someone's got to clear the trees and make everything flat and build roads around what's going to end up being a data center," he said. "These guys are the biggest company in the US that does this. The next biggest competitor is about one-fifth the size of Sterling." A little over half of the company's revenues come from data center clients now, Nelson said, and it should get a boost from an increase in semiconductor and pharmaceutical manufacturing buildouts in the years ahead. The stock is up 186% in 12 months. It's the third-largest holding in CTSIX at a 3.18% weight /glossary/weight . The second stock Nelson flagged is SiTime SITM https://markets.businessinsider.com/stocks/sitm-stock , a company that manufactures silicon timing semiconductor chips. Data centers are one of its major customer bases, accounting for 31% of revenue, Nelson said. After its recent acquisition of Renesas Electronics, that exposure should rise even more, he said. "Most electronic devices need this technology," Nelson said. "They've got fast growth, and they're really good at managing expectations, and these are huge markets." Shares of SiTime have risen 190% in the last 12 months. It's CTSIX's fourth-largest holding, weighted at 3.09%. Business Insider https://www.businessinsider.com/ai-hardware-stock-picks-to-buy-capex-beneficiaries-strl-sitm-2026-7 Get AI news in your inbox Daily digest of what matters in AI.