The Nasdaq added 0.7% to 25,889. The Dow climbed 0.9% to 51,202. But the real story this week was small caps. The Russell 2000 ripped 3.9%, now up 17.7% on the year and starting to close the gap with its larger siblings.

The catalyst? Reports that the US and Iran are closing in on an interim peace deal. Markets hate uncertainty, and a de-escalation in the Middle East removes one of the bigger tail risks investors have been pricing in.

You can see it in oil. Crude dropped 6.9% on the week to $84.29. Still up a wild 45.5% year to date, but that single week move tells you how much geopolitical risk premium was baked into the price.

Gold slipped 2.2% to $4,240, still negative on the year at -3.0%. The 10-year Treasury yield ticked down 1.1% to 4.49%. Bitcoin held its ground, up 1.1% to 63,758, though it remains down 27.1% on the year.

Market Recap

Weekly Heat Map Of Stocks

I Read The Data, Not The Headlines

Every week it’s something new. Tariffs, Iran, inflation, the Fed, recession odds, take your pick. The headlines change, but the questions don’t. Are we at the top? Is this the pullback that finally sticks?

Here’s the thing. I don’t trade headlines. I watch the data underneath them. And right now, the data is telling a much calmer story than the noise would have you believe.

Breadth Is Quietly Improving

While the S&P 500 was tracking toward its second straight weekly decline, something interesting was happening beneath the surface. The percentage of stocks trading above their 20-day and 50-day moving averages actually improved over the past couple weeks. At the same time, NYSE new lows have been declining, a sign that capital is rotating into areas of the market that had been lagging.

The takeaway. The index was wobbling, but the foundation underneath it was getting stronger, not weaker. 60% of S&P 500 stocks are above their 200-day moving average. Not a screaming buy signal on its own, but solid.

The Pattern Still Works

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By the time the close hit, your timeline was on fire. The bubble is bursting. The crash has begun. This is 1999 all over again.

I’ve heard it all before. So have you.

Here’s what I actually think is happening. And why almost nobody wants to believe it.

It’s the earnings, stupid.

The stock market doesn’t go up for no reason. It never has. It may feel random day to day. Week to week it can feel like pure chaos. But zoom out and stocks follow one thing. Earnings. Always have. Always will.

Right now, earnings are not just good. They’re historically great.

S&P 500 profit margins hit 15.6% in Q1 2026. An all-time record. Not close to a record. The record.

For every dollar of revenue American companies bring in, they’re keeping more of it than at any point in modern history. More than the dot-com boom. More than the pre-financial crisis peak. More than any period in the last two decades. That’s not a fluke. That’s what great businesses do over time. They get more efficient. They get more profitable. AI is turbocharging that trend right now.

And it’s spreading.

Everyone wants to make this a Magnificent 7 story. Like the other 493 companies are just along for the ride. Look at that chart. The rest of the S&P 500 is projected to grow earnings 18% in 2026. This isn’t a 7 company market anymore. The whole team is playing well.

S&P 500 forward earnings just hit a record $364.79 per share. The 2027 consensus sits at $395.95. Analysts keep raising estimates. Not cutting them. Raising them. That’s companies beating expectations and raising guidance quarter after quarter. The market is watching that happen in real time. That’s why it keeps going up.

Tariff fears didn’t break this. Rate fears didn’t break this. Estimates went up anyway. Every quarter. The market isn’t delusional. It’s doing exactly what it’s supposed to do. It’s pricing in a very profitable future.

The AI buildout is just getting started.

I’ve said this before and I’ll keep saying it until the data tells me otherwise.

The capex being poured into AI infrastructure right now is generational. We’re not talking about money chasing an idea. We’re talking about the most profitable companies in the world spending aggressively on a technology that is already showing up in margins. Already. In the first or second inning.

The internet took years before productivity gains showed up in the numbers. AI is moving faster. The results are landing sooner. And the companies spending the most are the ones already seeing it in their margins.

This isn’t hype. This is the most profitable companies in American history doubling down on the next wave of growth. That’s what a real bull market looks like from the inside.

New highs cause more new highs.

Here’s the thing that trips people up more than anything else.

All-time highs feel dangerous. They feel like the top. Like you’ve missed it. Like something bad is about to happen. That feeling is completely natural. It’s also completely wrong.

There is a reason new highs keep happening. The S&P 500 has closed at an all-time high over a thousand times in its near-seventy year history. What came next?

Another all-time high. Within the next week, 81% of the time. Within the next month, 93% of the time. Within the next year, 99% of the time.

New highs don’t kill bull markets. Deteriorating fundamentals kill bull markets. Look at the charts above. Tell me where you see deteriorating fundamentals. I don’t see them either.

About Friday.

The S&P 500 fell 2.6%. Semiconductors got crushed. A trillion dollars in market cap evaporated in a single session. The bears came out swinging.

A strong jobs report spooked the market on rate cut timing. That’s the whole story. A strong labor market means employed consumers with paychecks. That’s not bearish. That’s good for earnings. The market panicked over Fed calendar math and sold everything in sight.

It’s happened before. Here’s what happened next.

Since this bull market began, there have been 13 other days with a drop of at least 2%. Four trading days later, the market was higher 11 of those 13 times. Median gain of 1.2%. Dip buyers have been rewarded in this bull run. Consistently. Repeatedly. Panic sellers have not.

Where we actually are.

The red line is us. This bull market started in October 2022. Look at where we sit relative to every other major bull run that lasted more than 1,000 days. We are still early. The 1990s bull ran for over a decade. The post-2009 bull ran for eleven years.

Nobody rang a bell at the top of those either. Nobody told you it was safe to buy. It never feels safe. That’s the whole game.

You’re never going to be handed a comfortable moment to be fully invested. The news will always be scary. There will always be a reason to wait. There is always a reason to sell. The people who waited in 2023 because it felt too uncertain missed a 26% year. The people who waited in 2024 missed another 25%.

Waiting has a cost. Most people never add it up.

The bottom line.

Earnings are at records. Margins are at records. Estimates keep going up. The AI buildout is adding fuel to a fire that was already burning before most people believed it was real. The bear case is based on feelings. The bull case is based on numbers.

Friday was noise. The earnings are the signal. They always are.

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Markets held together through most of the week, then fell apart in the final session. The S&P 500 had its worst day since October 10, 2025. The Nasdaq dropped almost 5% on Friday alone, its biggest single-day loss since April 4, 2025, and wrapped up its worst week in 14 months with a 4.7% decline.

The Dow was the exception. It slipped just 0.3% for the week, largely escaping Friday’s carnage.

For the year, the scoreboard still reads positive. The S&P 500 is up 7.9% YTD. The Nasdaq is holding a 10.6% gain. The Russell 2000 leads the pack at 13.3%, despite falling 2.9% this week.

Away from stocks, the 10-year Treasury yield rose to 4.54%, now up 9% for the year. Oil climbed to $92.87, up 50% in 2026. Gold slipped 4.5% on the week. Bitcoin got the worst of it, down 14.3% on the week and now off 30.1% for the year.

One bad Friday doesn’t erase a good year. But it’s a reminder of how fast the mood can change.

Market Recap

Weekly Heat Map Of Stocks

The Cracks Are Starting to Show

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Consumer sentiment just hit an all-time low.

At the same time. Simultaneously. Those two things are happening right now.

Let that sink in for a second.

The University of Michigan Consumer Sentiment Index goes back to 1952. Over 70 years of data covering wars, recessions, pandemics, and inflation spikes. Americans are feeling worse about the economy right now than they did during COVID, the financial crisis, and the aftermath of 9/11.

I’ll be honest. That one got me. Really?

And yet, here’s the S&P sitting near record highs. So which is it?

Both actually. That’s the whole point.

The K-Shaped Economy Isn’t a Theory Anymore

You’ve heard the term. The K-shaped recovery. One group going up, one group going down, the gap between them widening every year.

We’re not debating whether it exists anymore. We’re watching it play out in real time.

If you own assets, things are good. Great actually.

Your 401K is up. The AI trade is minting wealth at a staggering pace, and if you hold any of the companies powering it, you’ve had a front row seat to one of the greatest wealth creation events in history.

Even if you’ve done absolutely nothing except own a home, you’re up substantially since COVID. Your exterior paint job could be peeling. Doesn’t matter. Property values have surged regardless.

If you don’t own assets? You’re getting squeezed from every direction.

Most Americans Are Invested. But Not Equally.

Here’s a chart worth pausing on. Most Americans (62%) own stocks in some form, whether directly or through a retirement account or mutual fund.

That sounds encouraging. But stock ownership is wildly uneven. The top 10% of earners now account for nearly half of all consumer spending in this country. The bottom 80% are losing ground. That gap has been opening for decades and has accelerated sharply since 2020.

The people feeling good right now are the ones who own the most. That’s not a coincidence.

The Cracks Beneath the Surface

Now here’s where it starts to get uncomfortable.

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Market Recap

Weekly Heat Map Of Stocks

On the sector side, tech continues to lead everything. Info Tech is up 21.3% on the year and put up a massive 13.8% just in May. Energy is the other standout, up 25.7% YTD, though it was the worst sector in May, falling 5.1%. Financials and Utilities also had tough months. Healthcare quietly had a solid May, up 3.2%.

The S&P 500 has already hit 21 new all-time highs in 2026. Through late May, that puts this year on pace with some of the strongest ATH years in history. For context, 2024 had 57. We have seven months to go.

The Russell 2000 deserves its own callout. Small caps are up about 18% through the first five months of the year. That is the best start since 1991. And it is outperforming the S&P, Dow, and Nasdaq.

The global picture is something else entirely. The US (SPY) is up nearly 30% over the past year and a half. But South Korea’s EWY is up 303%. Taiwan, Poland, Austria, Greece, Spain, and Colombia are all up more than 80%. Even Emerging Markets broadly are up nearly 65%. Indonesia is the big loser at -27.6%. International is having a moment.

I Said Don't Sell in May. Don't in June Either?

May closed strong. The S&P 500 gained about 4.9% on the month, which brings the combined April and May return to roughly 15.9%. That is a massive two-month run.

History says to take that seriously. When May gains more than 5%, the S&P 500 has never been lower one year later. That stat has held every single time since 1950, with an average return of nearly 20% in the following 12 months.

The April and May combination is just as telling. Every prior instance where both months gained more than 4% saw a positive June. Every single one. The average June return in those setups was around 2.4%.

And when the combined April/May return exceeded 10% (which happened in 1997, 2003, 2009, and 2020, and now 2026), the rest of the year was up double digits every time, averaging nearly 19%.

June also just tends to be pretty good on its own. The S&P 500 has finished higher in 9 of the last 10 Junes. That is a hard trend to argue with.

None of this means anything is guaranteed. But the historical setup heading into June is about as clean as it gets.

Hard Not To Be Bullish

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We took her and four of her friends to Door County for two nights. A real sleepover trip. My wife’s birthday also fell the day before, so the whole weekend carried a little extra weight. The kind of thing everyone will probably remember. The kind of thing I know I will.

Door County is a place that has followed me through my whole life. I went there as a little kid with my family. I went back as an adult and wrote the majority of my book there, finishing it on one of those trips. It’s also where Spilled Coffee began. Some of the most important moments of my life have happened in that water, those trees, that quiet. And now my daughter is building her own memories there.

Watching her with her friends, I kept thinking, where did the time go?

She is 10. Which means I’ve been a father for 10 years. Which means my parents are 10 years older than they were when she was born. Which means every person I love most in this world has less time ahead of them than they did a decade ago. Including me.

I’ve been sitting with that feeling for a while now.

Sometimes life sends you the same message from multiple directions at once. Lately, a movie, two TV shows, and a podcast I came across all circled the same theme without knowing it. Time. What we are waiting for. How short and precious life actually is.

I don’t think that’s a coincidence. I think I was finally ready to hear it.

In investing, I talk often about the idea that there is always something to worry about. Always.

Think back across just the last decade or so. The debt ceiling. Trade wars. A global pandemic. The fastest rate hikes in modern history. Inflation at levels not seen in 40 years. Bank failures. Russia invading Ukraine and what it meant for energy and inflation. War spreading through the Middle East. Tariffs. Recession fears that seemed certain and then didn’t arrive. More tariff fears. The news cycle has never once run out of reasons to be afraid.

And yet. The market went up. Not in a straight line. Not without pain. But it went up. The people who waited for the all-clear signal, who needed the headlines to calm down before they felt comfortable investing, missed most of the gains. Because the headlines never calmed down. They just changed.

There’s never a perfect moment to invest. There’s always a reason to wait.

That same truth applies to life. And I’m not sure I fully understood that until recently.

We’re always waiting for something.

Waiting until we save a little more. Until the kids are older. Until work settles down. Until we pay off the debt. Until next summer. Until we feel ready. Until the moment feels right. We manage our lives carefully, like we’re holding something fragile, protecting it from risk. And somewhere along the way, the life we were protecting passes us by.

I’ve been guilty of this. I think most of us are.

Whatever number you have saved right now, there’s probably a bigger number in your head that you’re waiting for. And when you get there, there’ll be another one after that. At some point, you have to ask whether the goalpost is ever going to stop moving. Whether you’re chasing a number that will give you permission to live, or whether that permission was always yours to give. The number goes up. The waiting continues. And the years keep passing.

We’ve told ourselves that convenience is optional, something we earn. But somewhere along the way, convenience became the default. Comfort became the plan. Waiting became the strategy. We optimized for safety and called it wisdom.

I’m not sure it is.

Watching my daughter blow out her candles, I thought about the windows we get in life. They’re smaller than we think. The window to take that trip. The window to call that person. The window to start that thing. The window to just be present with the people you love before everyone gets too busy, too old, or too gone.

My parents won’t always be here. My kids won’t always be kids. The friends I have right now won’t always be a short drive away. I know this. But knowing it and feeling it are two different things.

I’m feeling it now.

I write to learn. I write to teach. But sometimes I write because it’s the only way I know how to process something that doesn’t fit neatly into a conversation. This is one of those pieces.

I’m coping with time. With the reality of it. With the strange mix of gratitude and grief that comes from watching a life you love move forward whether you’re ready or not.

It’s not easy. It’s also the most human thing there is.

So here’s what I keep coming back to.

You’ll have as much life as you allow yourself.

Not as much as your schedule permits. Not as much as your bank account unlocks. Not as much as the market cooperates with. As much as you allow.

Make a memory a day. Not a grand one. Not a vacation or a milestone. Just a moment you chose on purpose. A conversation that mattered. A meal you actually sat down for. A walk you didn’t scroll through.

Die living, not existing.

Because the alternative, I think, is the real risk. Not losing money. Not making the wrong call. The real risk is arriving at the end of a life you managed very carefully, realizing you forgot to live it.

We all have a very small window.

I don’t know exactly what I’m waiting for anymore. But I’m trying, right now, to stop.

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The Dow was the week’s standout, surging 2.1% to close above 50,580 for the first time. Small caps were right behind it, with the Russell 2000 jumping 2.7% to 2,869 and now leading major indexes on a year-to-date basis at +14.7%. The Nasdaq added a modest 0.5%, closing at 26,344 with a strong +13.4% gain on the year.

On the fixed income side, the 10-year Treasury yield dipped to 4.56%, falling 0.8% on the week as bond prices caught a bid.

It was a rougher week for commodities. Oil slid 4.9% to $103.94, though it remains one of the year’s top performers at +67.9% YTD. Gold gave back 1.0% to close at $4,511. Bitcoin dropped 2.0% to 75,386 and remains the week’s notable laggard among the tracked assets, sitting at -13.9% for the year.

Market Recap

Weekly Heat Map Of Stocks

The View From Here

Eight straight positive weeks for the S&P 500. Let’s put it in context. Looking back 50 years, there have been eight prior instances where the S&P 500 strung together an 8-week win streak outside of a bear market. The historical paths that followed were almost uniformly positive over the next 100 trading days. History isn’t a guarantee, but it’s a reasonable tailwind.

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So instead of just doing my weekly investing update, I decided to do something different this week. A full portfolio review. Everything on the table. What I hold, my current conviction on each name, how I’m thinking about position sizing, and where I might be looking to make changes.

No fluff. Just transparency.

Let’s start with the performance.

How We Are Doing

Year to date, my portfolio is up 11.68%. The S&P 500 is up 7.22%. That is a nearly 5% edge over the index.

While the market was getting crushed in late March and early April, the portfolio held up. And when things recovered, we recovered faster. That is what a concentrated, high-conviction portfolio can do when you have the right names.

This is not a one-year fluke either. I have beaten the S&P 500 in 7 of the last 9 years and I’m now going for 8 of 10. Most people would just buy an index fund and call it a day. Nothing wrong with that. But I believe in doing the work, owning the right companies, and holding with conviction. 7 out of 9 years, that approach has paid off. This year, we are on track to make it 8 out of 10.

Now let’s get into exactly how.

What I Own

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The big story was inflation. Hotter than expected data sent the 10-year Treasury yield up 5.3% on the week to 4.60%, now up 10.4% year to date.

Oil surged 6.0% to $101.16, up a remarkable 74.6% for the year, keeping pressure on prices across the board. Gold and Bitcoin both pulled back, falling 3.7% and 3.8% respectively.

Market Recap

Weekly Heat Map Of Stocks

The Dow Components Performance YTD

My Take

Let me be blunt. Inflation is back. The 10-year yield is climbing. Oil is surging. There’s still a war. And yet, stocks keep going up. Seven weeks in a row for the S&P 500.

So what’s going on? It’s simple.

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Take a guess.

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The Russell 2000 had a strong week as well, gaining 1.7% to close at 2,861 and leading all major indexes year to date at +14.4%. The Dow was the quiet one, adding just 0.2%.

Oil pulled back sharply, falling 7.1% to $94.68, though it remains up 63.4% in 2026. Gold gained 2.0% to $4,724, the 10-year Treasury yield dipped slightly to 4.36%, and Bitcoin climbed 2.1% to close at 80,183, though it remains down 8.4% on the year.

Market Recap

Weekly Heat Map Of Stocks

Best Performing S&P 500 Stocks YTD

Worst Performing S&P 500 Stocks YTD

I’m Not The Only One Watching Inflation

Last week I told you inflation was building in the background. It turns out the bond market is already voting with its feet.

BlackRock’s Treasury Inflation-Protected Securities ETF pulled in $900 million in April, its largest monthly inflow since December 2021. That is not a small number and it is not a coincidence. This was only the second monthly inflow into the fund over the past five months. Something shifted in April and investors noticed.

It’s not just happening here either. Global inflation-linked bonds are up 2% year to date, outperforming every one of the 24 major fixed-income indexes tracked by Bloomberg. In March, Euro inflation-linked bond funds attracted nearly $600 million in inflows, the most since March 2022, reversing almost a year of withdrawals.

The message is consistent across markets. Investors believe the Iran War will leave a lasting inflationary impact on the global economy regardless of where energy prices go from here. They are not waiting to find out. They are positioning now.

I said last week to not look away from inflation. Clearly I am not the only one watching.

The Hormuz Ripple Effect Is Just Starting

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This week, Microsoft, Meta, Alphabet, and Amazon all reported Q1 2026 earnings. The numbers were extraordinary. The commentary was even more important.

Combined, these four companies are now on track to spend more than $700 billion in capital expenditures in 2026 alone. That’s nearly double what they spent last year, and $100 billion more than they had projected just one quarter ago.

Let that sink in for a second.

$700 billion. In a single year. On AI infrastructure.

That’s more than the GDP of most countries. And the pace is not leveling off. It’s picking up.

What They Said. Straight From the Earnings Calls

This isn’t about stock tips. It’s about listening. These CEOs and CFOs are telling you exactly what is happening. The question is whether you’re paying attention.

Microsoft (MSFT)

Satya Nadella did not mince words on the call:

“We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era. Our AI business surpassed a $37 billion annual revenue run rate, up 123% year-over-year. We are at the beginning of one of the most consequential platform shifts that will change the entire tech stack as we move from end-user driven workloads to workloads driven by end-users and agents. This will drive TAM expansion and change the value creation equation across the entire economy.”

Microsoft added one gigawatt of AI infrastructure capacity in a single quarter. CFO Amy Hood said the company expects to spend over $40 billion in Q4 alone, and the full-year capex bill lands at approximately $190 billion . Roughly $25 billion of that is driven by higher component pricing alone. She also made a remark that should stop every skeptic in their tracks. AI margins are already better than cloud margins were at the same stage of development.

Azure grew 40% year-over-year. The company extended its exclusive Azure agreement with OpenAI through AGI or 2030, with OpenAI contracting an incremental $250 billion of Azure services not yet reflected in current results. Microsoft’s commercial remaining performance obligation. Which is its total contracted future revenue, hit $627 billion, up 99% year-over-year.

Azure remains capacity constrained. Demand is beating supply. That’s not a problem. That’s a signal.

Alphabet (GOOGL)

Sundar Pichai’s opening line set the tone.

“It was a terrific quarter for Alphabet. Our AI investments and full-stack approach are lighting up every part of the business.”

Google Cloud grew 63% year-over-year, exceeding $20 billion in quarterly revenue for the first time. Cloud backlog nearly doubled sequentially to $462 billion. Then CFO Anat Ashkenazi said something that every investor needs to hear.

“We are seeing unprecedented internal and external demand for AI compute resources.”

She also delivered the most important forward-looking signal of the week. Alphabet expects 2027 capex to significantly increase compared to 2026.

Pichai noted that Alphabet is compute constrained in the near term and that cloud revenue would have been higher if we were able to meet the demand. Think about that. The business would be bigger if they could build faster. This is a supply problem, not a demand problem.

Here is perhaps the most remarkable data point from the entire week of earnings. Pichai disclosed that nearly 75% of all new code written at Google is now AI-generated. It’s reviewed and approved by engineers, but generated by AI.

That number was 50% just last fall. This is not a hypothetical future productivity benefit. It’s happening right now, inside the walls of one of the most sophisticated engineering organizations on earth. AI productivity is not ahead of us. It’s already here.

Amazon (AMZN)

Andy Jassy delivered what may have been the most quotable moment of the entire earnings season. Then he later reinforced it on CNBC:

“We’ve never seen a technology grow as rapidly as AI. Three years after AWS launched, it had a $58 million revenue run rate. In the first three years of this AI wave, AWS’s AI revenue run rate is over $15 billion — nearly 260 times larger. We believe AI is the biggest technology transformation in our lifetimes. It’s going to reinvent every single customer experience we know. When you have shifts that are this momentous, you want to bet big.”

AWS grew 28% year-over-year, its fastest growth in 15 quarters. It’s now a $150 billion annualized revenue run rate business. Amazon’s chips business crossed a $20 billion revenue run rate, growing triple digits year-over-year.

AWS backlog? $364 billion and that doesn’t include the recently announced Anthropic deal worth over $100 billion.

Jassy’s framing on capex was direct. Amazon invests 6-24 months before billing customers. They have high confidence the 2026 capex will be monetized well, with customer commitments for a substantial portion already in place.

Q1 cash capex alone was $43.2 billion.

Meta (META)

Mark Zuckerberg’s headline quote:

“We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs. We’re on track to deliver personal superintelligence to billions of people.”

Revenue was $56.3 billion, up 33% year-over-year. The company’s fastest growth since 2021. Meta raised its 2026 capex guidance to $125–$145 billion, up from $115–135 billion, driven in part by surging component costs including memory.

To put that visual in plain terms: Meta is now planning to spend more on AI in 2026 than it spent in the previous two years combined. And here is a detail that tells you just how acute the demand is. Meta is now extending the useful life of some data center servers from 6 years to 7 years due to what an internal memo called a “significant server supply deficit” caused by memory chip shortages.

The company did not anticipate the hardware demand growth it’s seeing. That’s not a red flag. That’s confirmation that demand is running hotter than even these companies expected.

Zuckerberg has been crystal clear. As more capital flows toward AI hardware, there is less available for headcount. The 8,000 layoffs announced this week are not financial distress. They are a deliberate reallocation of capital toward the AI race.

The stock has dropped on the capex bump. My view is that’s the market misreading the signal.

What These Four Businesses Look Like Today

Four companies. Four different business models. One shared conviction. Every single one of them is doubling down on AI infrastructure regardless of what it costs in the near term, because they all see the same thing on the other side.

The Numbers That Put It All in Perspective

Here is what $700 billion in AI capex actually looks like on a quarterly basis, company by company, stretching back to 2021.

The acceleration in that chart is not subtle. Q1 2026 alone, only one quarter, was $129.8 billion combined. Two years ago, that was a full-year number.

Now here is the part that should really get your attention. Morgan Stanley, after this week’s earnings, has again raised its hyperscaler capex forecasts. They now expect these five companies to spend approximately $805 billion in 2026. That’s up from their prior estimate of $765 billion. And for 2027? Morgan Stanley now sees the number crossing $1.1 trillion.

One trillion dollars. On AI infrastructure. In a single year.

To put the trajectory in even sharper relief. This is what the five-year arc looks like when you zoom out.

In 2023, these companies spent $149 billion combined. The 2027 estimate is $827 billion. That’s not a trend. That is a structural shift in how the global economy allocates capital.

AI Productivity Is Ahead of Us, Not Behind Us

One of the most important takeaways from this earnings season is what didn’t happen.

The bear case in that AI workloads have structurally lower margins than legacy cloud has been proven wrong. Cloud operating margins are expanding, not compressing, even as AI workloads scale. Google Cloud operating margin went from 17.8% to 32.9% year-over-year. AWS operating margin hit 37.7%.

Look at how cloud growth is accelerating, not decelerating, across all three platforms.

All three are reaccelerating. Google Cloud just hit its highest growth rate ever. The demand that was there in theory is now showing up in the revenue line.

This is still the buildout phase. The hyperscalers called out their need for more compute and noted that results could have been even better if more AI capacity had been available. This is not speculation about the future of AI. It’s the present day constraint on their businesses.

And it shows up in the backlog data too. Cloud revenue backlogs across AWS, Azure, and Google Cloud have gone parabolic. Now up 140% year-over-year combined. That is not a typo.

Back in my 2026 Outlook at the start of the year, I said we were in the third inning. I referenced a Bespoke survey at the time showing 46% of investors agreed. We’re still early in the cycle.

That view hasn’t changed. If anything, this week’s earnings calls confirmed it. The infrastructure is still being built. The monetization layer is just beginning to scale. The innings ahead of us are longer than the ones behind us.

I'm not just still bullish. I'm more confident than I was in January. But before we get to where I think the real opportunity sits, let's address the one question the bears won't stop asking because the answer is worth knowing.

But Can They Afford It?

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Records keep falling. The S&P 500 closed at a new all-time high of 7,230, up 0.9% on the week and now up 5.6% on the year. The Nasdaq hit its own record, climbing 1.1% to 25,114. Both indexes logged their 5th consecutive positive week.

The Dow gained 0.6% to close just under 49,500, while the Russell 2000 added 0.9% and continues to lead all major indexes year to date at +12.5%.

Oil crossed $100 a barrel this week and kept going, closing at $102.50. That is up 8.9% on the week and an eye-opening 76.9% in 2026. The 10-year Treasury yield edged up to 4.38%. Gold slipped 2.1% to $4,626, and Bitcoin gained 1.3% to close at 78,352, though it remains down 10.5% on the year.

Market Recap

Weekly Heat Map Of Stocks

YTD Heat Map of Stocks

Dow 30 Scorecard

What a Month. Now What?

Before we look ahead, let’s take a moment to appreciate what just happened.

The S&P 500 gained 10.4% in April. That is the index’s biggest monthly gain since November 2020, its 27th best month ever going back to 1928, and its 4th best April on record. Look at that chart. That green candle to close the month is hard to argue with.

Coming off the lows of late March, this was a historic snapback. Five consecutive positive weeks. The kind of month that reminds you why staying invested matters.

And technology was the engine. The S&P 500 Technology sector posted its second best month in its 27-year history, gaining 20% in April. Going back to 1926, there have been only two other times tech produced a 20%+ monthly total return at an all-time high. Look at what followed both of those instances.

Now the calendar flips to May. And you know what they say.

Sell In May? Not So Fast

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Buy this before earnings. Sell this before the Fed meeting. React to this headline. The investing content machine runs on urgency. And urgency is almost always the enemy of good returns.

I don’t operate that way. I buy companies I believe in for months and years. Not days or weeks. My personal portfolio is 8 to 12 names, concentrated, deliberate, and slow-moving by design. That’s not a limitation. That’s a choice. I’d rather be deeply convicted in a handful of great businesses than spread thin across a dozen ideas I half-believe in.

But I get asked the same question more than any other.

What else do you like?

Fair question. My portfolio is an open book. Readers see the names I own, what I paid, and how they’re weighted. But the portfolio only has so many slots. I have a hard rule about concentration and I’m not breaking it. What that means is there are companies I’ve done serious work on, businesses I believe in deeply, that never make it into the starting lineup simply because I’m already full.

Those ideas needed a home. So I built one.

The Spilled Coffee Double Shot is a curated list of 20 to 25 of my highest-conviction long-term ideas. Not maybes. Not a loose watchlist of things I’m vaguely interested in. Every name on this list has earned its spot.

Here’s how it works.

The ones I personally own are marked with a ☕. That marker matters. It means real money is on the line, not just an opinion. The rest of the list is the bench. Companies that meet my standards, that I’ve done the work on, and that I’d move into the starting lineup under the right conditions.

What you won’t find here is a 12-month price target. I think they’re one of the most useless things in investing. Just a guess about where the crowd will stand a year from now. Instead each name comes with a simple conviction card, the core thesis, the key risk I’m watching, and what would change my mind. That last part is something most lists never tell you. I think it’s the most important part.

The list doesn’t change on a schedule. It changes when my thinking changes. When something earns a spot or loses one, I’ll tell you exactly why. No mystery moves.

This is my answer to everyone who’s ever asked what else I like. All 20 names. The conviction behind each one. Right here in one place.

That’s the Double Shot.

The full Double Shot list, all 20 conviction cards and the complete roster, is available to paid subscribers. Paid subscribers also get full access to my personal portfolio, including my cost basis and weighting on every name I own. If you’ve been thinking about upgrading, this is the right time.

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The numbers behind the rally are hard to ignore. The Nasdaq has surged 16% in just 16 trading days, and the broader tech sector is up 20% over the past three weeks. Both semiconductors and technology closed out their 18th straight day in the green, the longest winning streaks on record for each.

The Dow was the lone laggard, slipping 0.4%, while the Russell 2000 added 0.4% and leads all major indexes year-to-date at +11.5%. Oil surged 13.2% to $94.92, Gold pulled back 2.8% to $4,724, and Bitcoin gained 5.3% to close at 77,767.

Market Recap

Weekly Heat Map Of Stocks

YTD Heat Map of Stocks

Why Is the Market Ripping?

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That’s the truth. No sugarcoating it. If you had read my first post, you probably wouldn’t have come back for a second one. I knew it then and I know it now. But I kept going anyway.

That’s kind of the whole point.

Spilled Coffee turns five years old this month. April 2021 feels like a long time ago and somehow also last week. When I hit publish on that first post, I was writing for nobody. Literally nobody. A handful of friends. A few family members. People who felt obligated to open it.

Five years later, over 12,000 people in more than 125 countries open this newsletter. That number still stops me every time I think about it.

I Didn’t Go to College

I’ve never hidden that fact. I’m proud of it, actually.

I taught myself how to start a business. How to run it. How to sell. How to lead people. I slept on the floor of my office in those first days because I had to. There was no blueprint. No map. No mentor handing me a playbook. I had to figure it out as I went.

That’s still how I operate. It’s the only way I know.

When you walk into my office today, the first thing you see is a quote on the wall. It’s been there since day one. It’s not coming down.

“Do not go where the path may lead, go instead where there is no path and leave a trail.” Ralph Waldo Emerson.

I didn’t know it at the time, but writing Spilled Coffee would become one of the clearest expressions of that idea I’ve ever had.

Writing to Learn

Here’s something I didn’t expect when I started: writing made me smarter.

Not immediately. Not even noticeably at first. But over time, the act of sitting down and trying to explain something forced me to actually understand it. You can’t fake clarity on the page. Either you understand what you’re talking about or you don’t. The blank page has a way of revealing which one is true.

I wanted to learn more about investing. So I wrote about investing. I wanted to understand business better. So I wrote about business. Every post was me working something out. Still is.

That’s not a method I read about in a book. It’s something I stumbled into. You learn by doing. And writing has been one of the most powerful forms of doing I’ve found.

You have to let yourself write badly before you can write well. I’ve lived that. Every week for five years. Some weeks the words come easy. Other weeks I’m grinding. But I show up. Every damn week.

That discipline didn’t come naturally. It was built. The same way I built my business. The same way I learned to invest. One week at a time.

A Hobby That Became Something More

I started this newsletter because I wanted to. Not because someone told me to. Not because there was a business plan behind it. I had things I wanted to say and I needed a place to say them.

What I didn’t know is that the process would hook me.

There’s something that happens when you hit publish. A small rush. A sense of completion. And then immediately, your mind starts working on the next one. I chased that feeling every week for five years. I still do.

What started as a hobby I did for myself quietly turned into something I couldn’t have imagined sitting in that office in April 2021, writing to an audience that barely existed.

Build. Create. Keep Going.

Start before you’re ready.

I wasn’t a good writer when I started. I’m better now. I’ll be better in five more years. The only way that happens is by doing it. Over and over. Badly at first. Better over time.

You don’t need a degree. You don’t need permission. You don’t need to know exactly where it’s going.

You just need to start. And then keep going.

Five years in, I wouldn’t trade any of it.

To everyone who has opened this newsletter, shared it, replied to it, or simply read it over their morning coffee. Thank you. You’re the reason this thing became what it is.

Here’s to the next five.

Thank you for reading! If you enjoyed Spilled Coffee, please subscribe.

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The Nasdaq has strung together 13 consecutive winning sessions. That is the longest winning streak since January 1992. The tech ETF XLK matched it, also up 13 straight days. The software ETF IGV put together its best week since October 2001.

From the March 30th lows, the S&P 500 is up 13% in just 14 trading days. That is not a slow grind. That is a rocket ship.

Here is where things stand across the board:

Market Recap

A few things jump out. Oil is still up 45% year-to-date despite falling 13% this week as Iran ceasefire optimism crept in. Gold is up 11% on the year and quietly doing its job. Bitcoin is the only red number on the board at -11.7% YTD. And the Russell 2000 is actually the YTD leader of the major indexes at +11.1%, which does not get nearly enough attention.

Weekly Heat Map Of Stocks

YTD Heat Map of Stocks

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“I didn’t realize this. Is Nike dead?”

The response was unlike almost anything I’ve posted. Strong opinions everywhere. People had a lot to say about Nike. Some defended it. A lot didn’t.

That told me something. When a stock generates that kind of reaction, it’s worth paying attention to.

So let’s dig in.

The Chart That Started It All

That’s not a typo. Nike is down 65.77% over the past five years.

Even over ten years, you’re down 25.71%.

You held one of the most recognizable brands on the planet for a decade and lost money.

Meanwhile the S&P 500 is up over 61% in just the last five years.

That chart is painful to look at. Two lines going in completely opposite directions. Nike has been one of the worst trades you could have made over the past several years.

This week it hit its lowest closing price in 12 years.

It is now in its largest drawdown in over 30 years.

And on April 1st, after reporting earnings, Nike had its single worst day in 40 years. Down 15% in one session. No April Fools joke.

Goldman Sachs, JPMorgan, and Bank of America all downgraded it the same morning. Three of the biggest banks on Wall Street hitting the exit at the same time.

So. Is Nike dead?

Not exactly. But it is very much broken.

What Went Wrong

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Oil tells the real story of the week. WTI surged 10.5% to close at $110.85 a barrel, and briefly touched $115 before the Hormuz headlines cooled it off. Oil is now up 93% for the year. That number is not a typo.

Gold had a strong week too, up 4.0% to $4,703, and is now up 7.7% on the year. The 10-year Treasury yield ticked down slightly to 4.31%, a sign that bond markets are at least not panicking further for now.

The Russell 2000 remains the only major index in positive territory for 2026, up 1.2% YTD. Small caps are less exposed to the global earnings pressure that high oil creates for multinationals. Worth watching.

Bitcoin is still stuck. Up 1.1% on the week, but down 23.6% for the year. Risk-off has not been kind to crypto.

One week does not make a trend. But after five straight weeks of selling, the bulls finally had something to cheer about.

Market Recap

Weekly Heat Map Of Stocks

YTD Heat Map of Stocks

The Dow Report Card

Q1 Recap

The first quarter is in the books. It wasn’t pretty.

The S&P 500 finished Q1 down 4.6%. That’s the worst quarterly performance since Q3 2022, when Russia’s invasion of Ukraine rattled global markets. Three years of double-digit gains, gone in 90 days.

If you had told investors in January that bitcoin would be the single worst-performing asset class by the end of March, most would have laughed. But here we are. Bitcoin dropped more than 23% while commodities ripped 30%. Large-cap U.S. stocks weren’t far behind bitcoin on the losers list. That’s not a lineup many saw coming.

Here’s what the damage looked like at the sector level. Energy was the clear standout. Everything else was mostly red.

The megacaps didn’t just underperform the market. They led it lower. Microsoft is down more than 23% year-to-date. Tesla is off nearly 17%. Every name on this list is in the red. Most of them are sitting in oversold territory.

One notable split: small and mid-caps are still positive on the year. It’s the mega-cap weight dragging large-cap indexes down. The equal-weighted S&P 500 tells a very different story than the cap-weighted one.

The top performers this quarter tell a story about two things: memory chips and oil.

Sandisk finished Q1 up 168%. It topped the entire S&P 500 in 2025 at +559%, and it’s apparently trying to do it again. No stock has ever topped the index back-to-back. It’s fueled by hyperscaler demand for flash storage in AI data centers. The broader memory and optical group followed its lead. Lumentum was up 92%. Ciena up 66%. Western Digital up 57%.

The other big winner was energy. The Iran conflict pushed crude well above $100 a barrel and 15 of the top 30 performers in Q1 were energy or chemical names. APA up 73%. OXY up 58%. Valero up 52%. It was the best quarter on record for energy stocks relative to the S&P 500.

The losses were concentrated in software. Investors spent most of the quarter asking a simple question. If agentic AI can do the work, why pay for the enterprise software?

That fear alone crushed some of the biggest names from 2025. Software companies made up more than half of the bottom 20 performers in Q1. Trade Desk dropped 40%. Workday fell 38%. Adobe was off 31%. Salesforce down 30%. AppLovin, which surged 108% in 2025, was the single worst performer in the index this quarter, falling 41%.

The Q1 story is clear. What happens next is the harder question. Paid subscribers get the full Q2 outlook, a look at what the technicals are saying, and a breakdown of today's jobs report below.

Looking Ahead To April

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