The Vanguard Russell 2000 ETF is outperforming the S&P 500 with an 18% year-to-date gain, driven by domestic-focused small-cap companies benefiting from U.S. government policies and AI infrastructure demand. However, rising inflation and anticipated interest rate hikes pose a significant risk, as 32% of Russell 2000 companies carry floating-rate debt that will become more expensive, potentially hampering their growth and earnings.

TTM Technologies stock surged over 15% after reporting record Q1 2026 results with net sales up 30% year-over-year to $846 million and non-GAAP net income up 52% to $0.75 per share, both significantly exceeding analyst expectations. The company attributed strong performance to sustained demand from data center and networking markets driven by AI infrastructure expansion. Q2 guidance also beat analyst estimates, positioning TTM as a beneficiary of long-term AI infrastructure growth.

The article highlights five under-the-radar AI infrastructure companies positioned to benefit from the AI boom's backbone needs: circuit boards, power systems, and fiber networks. These pick-and-shovel plays offer growth opportunities without premium valuations, supported by government spending tailwinds like the BEAD program, though execution risks remain.

Tech and infrastructure stocks surged last week driven by AI and data center momentum. Applied Optoelectronics led with a 37.18% gain after securing a $71 million order for data center transceivers. Nebius jumped 33.92% on reports of acquiring AI21 Labs, while CoreWeave gained 25.63% following deals with Anthropic, Meta, and Google. Intel rose 22.42% after announcing its Terafab project participation.

Google's TurboQuant algorithm reduces AI memory requirements by 83%, negatively impacting memory chipmakers like Micron and SanDisk. However, three stocks could benefit: Qualcomm (mobile AI processors), Broadcom (data center networking), and TTM Technologies (circuit boards), as lower AI costs may increase overall demand and deployment across industries.

The author highlights three lesser-known AI stocks worth watching: CoreWeave (AI infrastructure/data centers), TTM Technologies (circuit boards for data centers), and Fastly (content delivery and cybersecurity). All three show strong revenue growth, but only TTM is currently profitable. CoreWeave faces high debt and operational costs despite impressive sales growth, while Fastly is reducing losses. The author is monitoring these stocks for potential price dips before investing.

Federal Reserve Chair Jerome Powell warned that the escalating Middle East conflict will push U.S. inflation higher in the near term, though he ruled out stagflation and described the economy as resilient. The Fed held rates unchanged at 3.50%-3.75%. Powell noted that while higher oil prices would boost domestic drilling and corporate profits, there would still be downward pressure on spending and employment. Markets reacted negatively, with equities falling and several large-cap stocks declining significantly.

Metavasi Capital LP initiated a new position in TTM Technologies (TTMI) worth $11.81 million, acquiring 171,202 shares in Q4 2025. The position represents 4.81% of the fund's AUM and became its eighth-largest holding. TTMI shares have surged 249.1% over the past year, driven by strong Q4 sales growth of 19% YoY and robust demand from data centers for AI systems. However, the analyst recommends waiting for a pullback, as the stock trades at a P/E ratio of approximately 64, near its 52-week high.

Neo Ivy Capital Management acquired 100,879 shares of TTM Technologies (TTMI) for approximately $6.96 million in Q4 2025. TTMI stock has surged 259.82% over the past year, driven by strong fundamentals including 19% revenue growth and expanding margins, with data center computing and AI demand fueling 36% of sales. The company projects 15-20% sales growth for 2026.

S&P Dow Jones Indices announced index changes effective January 30 and February 2, 2026. TTM Technologies, Dutch Bros, Advanced Energy Industries, and American Healthcare REIT will be promoted to the S&P MidCap 400, while Amneal Pharmaceuticals, Apellis Pharmaceuticals, and LegalZoom.com will join the S&P SmallCap 600. These changes follow several pending M&A transactions and corporate actions.

The Russell 2000 small-cap index has surged to record highs in early 2026, outperforming the S&P 500 and the Magnificent Seven tech stocks for the first time since 2008. Driven by strong economic data, improving earnings revisions, and broad-based gains across 77% of constituents, small caps are positioned for continued outperformance. Five stocks—Bloom Energy, Kratos Defense, AeroVironment, Hecla Mining, and TTM Technologies—have contributed significantly to the rally.

Google's Alphabet has made significant strides in AI with Gemini 3, challenging OpenAI and positioning itself competitively in the AI ecosystem. Three stocks are highlighted as potential beneficiaries of Google's AI infrastructure expansion.