Silver Is Down Big From Its Peak. Is Now the Time to Buy the Dip?
Beginning in April 2025, silver began a rapid ascent, nearly quadrupling in price from about $29 per ounce to a peak of more than $115 per ounce in January of this year. The price increase was driven by the growing demand for silver to serve the massive AI data center build-out. Those cloud facilities use silver in:
- Server connections and soldering
- Thermal paste and heat dissipation materials
- High-frequency connectors and switches
- Photovoltaic cells powering renewable energy initiatives at server farms
- Electromagnetic shielding for sensitive equipment
Despite rising demand for the white metal, its supply has remained constrained. Silver mining output has not kept pace with demand in recent years, as mine supply growth has remained sluggish.
All that said, silver is now far off that January peak. The price has fallen to about $58 an ounce, half what it was then.
Image source: Getty Images.
In June, I wrote an article saying it was time to buy the dip in this precious metal, which is so critical to the AI build-out. I recommended the iShares Silver Trust (SLV -3.43%). Yet that stock has fallen since then, as have the stocks of silver producers like First Majestic Silver (AG -5.04%), Wheaton Precious Metals (WPM -4.02%), and Pan American Silver (PAAS -4.24%).
Today’s Change
(-3.43%) $-1.84
Current Price
$51.67
Key Data Points
AUM
$28B
Expense Ratio
0.50%
First Majestic is down despite reporting higher silver and gold production in the second quarter and raising its full-year 2026 production guidance. We’ll get more data on Pan American Silver on Aug. 12, when it reports second-quarter results, and on Wheaton Precious Metals on Aug. 6.
Most stocks related to the AI build-out are suffering now
Much like companies that provide other critical inputs to the AI data center build-out, including copper, memory chips, and construction equipment, silver producers are now closely tied to investor sentiment surrounding that build-out and whether the massive capital expenditures involved will deliver returns.
McKinsey estimates that global spending on data centers could reach a stunning $7 trillion by 2030. And despite recent reservations among investors and resulting price movement in related stocks, major data center hyperscalers, including Meta Platforms, Amazon, Alphabet, and Microsoft, appear to be forging ahead with their spending plans.
So if, like me, you believe these hyperscalers will spend all that money and you realize that the AI infrastructure requires enormous amounts of silver, copper, memory chips, and other inputs, you might consider buying the current dip in silver, as it may not last long.
