Contact Us | About Us | PacerETFS X | PacerETFS LinkedIn     Logout

Loading...
Pacer ETFs
Download

The PACER PULSE
June 2026

Download PDF Share on LinkedIn Tweet

Beyond Compute: How TRFK Continues to Capture the AI Infrastructure Buildout

– Danke Wang, CFA, FRM, Portfolio Manager

Beyond Compute: How TRFK Continues to Capture the AI Infrastructure Buildout

Looking Beyond the Benchmark...

In our November 2025 Pacer Perspective, Infrastructure for Innovation: How TRFK Supports AI & Beyond, we argued that the long-term AI opportunity extends beyond the companies developing AI applications. Instead, we focused on the broader data center ecosystem that enables the creation, transmission, storage, processing, and protection of data.

The Pacer Data and Digital Revolution ETF (TRFK) was built around this idea. The strategy seeks exposure across the key layers of digital infrastructure, including semiconductors, networking and hardware, software, and power and cooling systems. Each layer plays a critical role in supporting the digital economy.

Early investor attention around AI focused primarily on chips and compute capacity. More recently, however, conversation has broadened to include the infrastructure required to support AI deployment at scale. Memory capacity, storage performance, networking bandwidth, power availability, and cooling efficiency have become increasingly important considerations, as AI models become larger and more sophisticated. In many respects, the market is recognizing that AI is not supported by compute alone, but by a much broader set of technologies.

This broader infrastructure opportunity is precisely what TRFK was designed to capture. As AI investment accelerates, spending will increasingly extend beyond processors and benefit multiple layers of the data infrastructure.

The latest TRFK reconstitution reflects that trend, highlighting areas benefiting from accelerating AI infrastructure spending. Two of the clearest examples can be found in memory and storage infrastructure, as well as power and electrical systems.

Memory & Storage Become Increasingly Critical

One of the clearest themes emerging from the rebalance was increased exposure to memory and storage companies, including SK hynix, Micron, Sandisk, and Kioxia.

Memory & Data Storage Names in TRFK

5/15/2026

Name Weight (%)  
SK hynix Inc. 5.97 New
Micron Technology, Inc. 5.65 New
Sandisk Corporation 2.61 New
Seagate Technology Holdings PLC 2.23  
Western Digital Corporation 2.08  
Kioxia Holdings Corporation 1.91 New
NetApp, Inc. 0.30  
Rubrik, Inc. Class A 0.13  
Silicon Motion Technology Corporation Sponsored ADR 0.11  
Commvault Systems, Inc. 0.06  

Source: Pacer Advisors, FactSet

While GPUs often receive the most attention, they cannot operate efficiently without access to large amounts of memory and storage. Training and deploying AI models requires enormous datasets that must be stored, accessed, and transferred at increasingly high speeds. As AI adoption expands, memory and storage are becoming as important as compute in determining overall AI capability.

Among the additions, Sandisk highlights how investor perceptions of AI infrastructure continue to evolve. Historically, investors viewed Sandisk primarily as a cyclical NAND flash supplier serving smartphones, PCs, and enterprise storage markets. Following its February 2025 separation from Western Digital, the company became a pure-play flash storage business. The narrative began to shift in late 2025 as the company is increasingly being recognized for its role in supporting the high-performance storage requirements of modern AI data centers.

SK hynix and Micron reinforce the theme from the memory side of the AI stack. Both companies are among the leading suppliers of High Bandwidth Memory (HBM), a critical technology that enables AI accelerators to process massive datasets efficiently, helping address one of the key bottlenecks in AI performance.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. YOU CANNOT INVEST IN AN INDEX.

The Growing Importance of Power Infrastructure

Although AI is often discussed as a software or semiconductor story, the reality is that modern AI data centers are becoming increasingly dependent on physical infrastructure. Arguably, AI data centers are becoming industrial projects as much as technology projects. Higher computing density translates directly into higher power consumption, a greater need for reliable electrical capacity, and more sophisticated thermal management.

Not surprisingly, industry conversations have shifted toward issues such as power availability, grid capacity, electrical distribution, and cooling efficiency. These challenges are becoming central considerations for hyperscalers and enterprises seeking to deploy AI at scale. Companies operating in these areas are becoming important beneficiaries of the broader AI buildout.

TRFK’s latest reconstitution increased exposure to companies supporting these critical areas through additions such as ABB, Schneider Electric, Eaton, and Vertiv.

Powering & Cooling Names in TRFK

5/15/2026

Name Weight (%)  
ABB Ltd. 2.38 New
Schneider Electric SE 2.21 New
Eaton Corp. Plc 1.94 New
Vertiv Holdings Co. Class A 1.78 New
Trane Technologies plc 1.29  
Johnson Controls International plc 1.09  
Carrier Global Corp. 0.67  
Legrand SA 0.58  
nVent Electric plc 0.34  
AAON, Inc. 0.14  
SPX Technologies, Inc. 0.13  
Munters Group AB 0.05 New
Standex International Corporation 0.04 New
Atkore Inc 0.03  
AQ Group AB 0.03 New
LS Eco Energy Ltd. 0.02 New

Source: Pacer Advisors, FactSet

Each company plays a distinct role within the data center ecosystem. ABB and Schneider Electric provide electrical equipment, automation systems, and power management solutions. Eaton provides intelligent power management solutions spanning power distribution, backup power, and data center infrastructure, while Vertiv focuses on data center power and cooling technologies.

Together, these businesses support the physical foundation on which modern AI systems operate. The growing representation of these companies within the portfolio reflects the rising importance of power infrastructure within the broader AI investment landscape.

Takeaways

The latest TRFK reconstitution highlights an important evolution in the AI investment landscape. While the first phase of AI spending was centered on compute, the next phase is shifting toward the broader operational infrastructure required to support the deployment at scale.

The additions to the portfolio reinforce this idea. Increased exposure to memory, storage, power, and electrical infrastructure reflects the growing importance of the technologies that enable AI systems to operate efficiently.

Importantly, the latest reconstitution does not represent a change in the TRFK investment philosophy. It is a continuation of the theme that has guided the strategy since inception. The rebalance simply reinforces exposure to where AI-related spending appears to be accelerating and highlights the technologies supporting the next phase of AI deployment.


Download