Shesa's MAY 2026 Investment Blog
By Shesa Nayak
Welcome to Shesa’s investment Blog!
U.S Stock Market Update
April was one of the spectacular months for the stock market in years. Starting 7th of April, the market started picking up and resulted as one of the strongest month. The S&P 500 surged over 10.5%, marking its best monthly gain since 2020. The Nasdaq jumped humongous 15.3%, and the Dow was up 7.1%, all closing near record highs. The S&P closed at 7230.12 and Nasdaq closed at 25,114.44. When I wrote my last blog, the market was going nowhere but down. But what a turnaround! Suddenly it took a U turn and rocketed higher taking most retail investors in surprise. Furthermore, Small Cap index Russell 2000 is up 13.33% and Semiconductor is up a massive 31.08% this year.
So what drove the market for such a huge run? I can attribute it to solid corporate earnings, especially from big tech and AI-related companies. Most of the big tech released their earnings last week. Google’s result was the best among the lot, Apple had a great quarter, Amazon had a good quarter, Microsoft had a reasonable quarter. The only laggard was META which came with OK earnings and guidance. More importantly, all these big tech increased their CapEx spending plan. Big Tech companies plan to spend more than $700 billion on AI infrastructure this year alone. What it means - it’s good for AI sector - AI infrastructure, energy, industrial and anything related to AI are mostly having a wonderful time. But the key point was, a pullback in oil prices after the recent spike from Middle East tensions, the Fed holding rates steady with inflation still elevated from energy costs, so no rate cuts soon. Geopolitics, and AI investment hype are the big themes creating these gains. Furthermore, Q1 GDP grew at 2%, not great but not bad either.
Q1 2026 Earnings
One of the most important contributor of this rally is the earnings from mega tech companies and overall corporate results in general. About 63% of S&P 500 companies have reported results. The earnings growth has been fantastic, 27.1% year-over-year. Analysts were expecting 13% growth. So, it’s a huge jump from what was expected at the start of the quarter. It’s expected to be the strongest growth since late 2021, post COVID ramp up. Big tech Alphabet, Apple. Amazon, Microsoft and Meta, drove most of it. Next big earnings Nvidia (NVDA) is expected to report on May 20. We will see whether Google will take over as the biggest company based on market capitalization or NVDA will continue to rule.
Federal Reserve
The Federal Reserve kept rates steady at 3.5–3.75%. Fed chair J Powell had his last meeting last week. Starting May 15, 2026, Kevin wash is expected to take charge of Federal Reserve. Kevin Warsh has been nominated by President Trump and confirmed by the Senate Banking Committee as the next Federal Reserve chair to replace Jerome Powell, who steps down on May 15, 2026. Warsh may be more favorable to cut interest rate. But the crude oil prices have gone past $100. The escalated oil, steel and aluminum prices could potentially push inflation towards 4-5% in the coming months. If so, Kevin Warsh can’t do much in the short term. We will see how it plays out.
Now that we are in May, historically next 6 months does not bode well for the stock market. So, the big question is where we go from here? I can share my thoughts but let’s look at the stock market index first.
Indexes | Close FRI 12/31/25 | Close FRI 3/20/26 | Change in 2026 | % Change in 2026 |
DOW | 48,063.99 | 49499.82 | 1,435.83 | 2.99 |
S&P 500 | 6,845.5 | 7230.12 | 384.62 | 5.62 |
NASDAQ | 23,241.99 | 25114.44 | 1,872.45 | 8.06 |
Russel 2000 | 2,481.91 | 2,812.82 | 330.91 | 13.33 |
SOX (Semi) | 8,083.13 | 10,595.34 | 2,512.21 | 31.08 |
Economic
- CPI/Inflation: 3.3%
- GDP Growth: 2% Q4, Yearly growth: 2.7%
- U.S. payrolls: Rose by 178,000 in March, more than expected. Most of the jobs were contributed by healthcare 76K, followed by 44K - leisure and hospitality, 26K - construction.
- Unemployment at 4.3%
- Interest Rate: 3.75%
- ISM Manufacturing PMI (March): 52.7vs. 52.5 forecast; expansion for 3rd month
- Retail Sales (March): 1.7%
Key Economic Report next week (May 4-8)
Two very important numbers are expected next week on inflation due to higher oil and gas prices.
- Tuesday, 5/5: ISM services, B+New Home Sales
- Wednesday, 5/6: ADP employment
- Friday, 5/8: U.S. employment report
What to Expect going forward - The bigger picture
There is a saying “Sell in May and Go away”. But I guess this proverb is not tru for Jun, July and August. In last about 100 years, historical number shows that May is slightly negative, but June, July and August are reasonably good.
If you recall, in my last month’s blog I had written all the negatives but two key positives. Here is a copy of that:
There are some positives based on history. We will see whether history will repeat this time.
- When oil gains more than 40% in 20 trailing days S&P 500 has returned 16% in 6 months and 33.7% in one year. There were 6 such evens since 1985. So far, it turned right
- Geopolitical situations have always created good opportunities for long term investors. So far, this also turned right
Just in last one month market has gone up in double digits. But the question is, whether the rally will contuse going forward? Well, it’s anybody’s guess and honestly I don’t know. Having said that, I think the rally can continue but it’ll likely slow down and get choppier. For the next few weeks and months, Earnings momentum and AI spending should keep supporting the market through May and June, especially with tech still delivering strong results. But valuations are high, oil prices remain escalated, and historically May through October tends to be weaker than the first half of the year. Also, let’s not forget that market becomes very volatile during the mid-term election year, particularly before the election. These days markets go up or down like knee jerk and hence it’s advisable to be on alert always. These market are not buy it and forget it. We need to be watchful. I have written my strategy so many times in the blogs and discussed during my investment meets. Strategy does not keep changing always, but need to re-strategize or fine tune depending on market situation. I will stay selective with strong earnings names, and keep some cash ready for dips. Those companies who came with solid earnings and benefited because of AI are the ones to keep an eye on. If they come down, that may provide further opportunities for foreseeable future. Though Software stocks have bounced back to some extent, I am not too keen to venture there. Because it’s too early to know what kind of disruption AI would bring to them. In the whole process, I may lose some opportunities but I guess that’s OK.
Some Risk factors to keep in mind
The crude Oil is back toward $110 on renewed Hormuz tension. The ISM Manufacturing Prices Index was at 84.6 as of May 1, its highest reading since early 2022, up 43% in three months, the biggest three-month spike since late 2020. This is increasing the manufacturing input cost pipeline. The oil, steel, aluminum prices have gone up significantly. All these are inflationary. For March CPI/Inflation was 3.3%. But expect inflation to escalate significantly in May and June possibly towards 4% to 5%. With higher inflation Fed may not be able to cut rates. Wall Street may become concerned that inflation is rising. In addition, the real wages stay negative. So, this I believe is the biggest risks. At this time market does not care but when those data comes, we better be watchful on how Wall Street will react.
Let me sum up: I would expect more range-bound trading with occasional pullbacks rather than another big rally like we saw in April. I can say we have two economies - AI economy which is on fire - the semiconductor sector, memory, storage, energy, industrials and any other AI related infrastructure stocks. This is the market where fundamentals with momentum is working. So, the winners keep winning and many others part of non-AI economy keep going down. It’s our choice which side we should be. I prefer to go with the market direction - AI economy. But again, not to put all the money concentrated in there, because any indication of AI slow down may have huge impact on these stocks, though I feel we are not there yet. But the biggest risk is escalated oil, steel and aluminum prices which could potentially push inflation towards 4-5%. That look little scary. So, though we can expect continued momentum from earnings, but watch inflation, oil prices, and any Fed signals closely. The bull run feels solid, but volatility could return on higher inflation and geopolitical risks. Hence, a little bit of hedging is always a good idea as an insurance even though those may be waste if market keeps going up. But it won’t keep going up infinitely. Also, remember 90% of the long term stock return comes from less than 10% of the best days of the market. Hence staying on the sideline, or having too much of short position may not be a great idea as nobody can predict the best days of the market. Coincidently, let’s not forget the risks brewing up due to possible heightened inflation. So, we may stay bullish but keep a close eye on these events and take our action quickly when time comes.
Stock Market TOP sectors for 2026 (as of 5/3/26)
|
Sector |
Performance Year-To-Date % |
|
Energy (TOP) |
30.69 |
|
Materials |
11.83 |
|
Industrials |
11.49 |
|
Consumer Staples |
10.7 |
|
Communication Services |
10.0 |
|
Utilities |
8.96 |
|
Information Technology |
8.08 |
|
HealthCare (WORST) |
-6.33 |
You can click below link to view complete sectorial performances:
Source: https://www.barchart.com/stocks/sectors/rankings?timeFrame=Ytd
Now let me discuss the stock for this month in my blog portfolio.
Micron Technology, Inc. designs, develops, manufactures, and sells memory and storage products in the United States and around the world. It primarily designs and manufactures memory and storage semiconductors - Dynamic Access Memory (DRAM) and NAND flash. NAND is a type of non-volatile flash memory technology that retains data without power, commonly used for high-density, cost-effective storage in SSDs, USB drives, smartphones, and memory cards. The company serves the AI/Data center, PC, graphics, networking, automotive, industrial, consumer embedded markets, smartphone and other mobile-devices. Micron Technology was founded in 1978 and is headquartered in Boise, Idaho, USA.
Why do I like Micron?
Micron (MU) is a major player in high-bandwidth memory (HBM) for AI. As we are venturing into the AI age, this company is one of the backbone of AI/Data Center needs and growth. AI is eating massive amounts of high-bandwidth memory, supply is tight, and Micron’s sold out through the rest of this year. Potentially, we may know how far they are sold out for next year during its earnings call on June 24. Micron (MU) has been one of the hottest stocks this year. It’s up about 90% year to date, after absolutely crushing earnings. Revenue jumped nearly 200% in their last quarter alone. This isn’t just another chip rally. It’s a genuine memory supercycle driven by data centers, and Micron’s finally getting the pricing power it hasn’t had in years. The stock is on tear. And I believe the trend will continue for foreseeable future.
Financials
- Q2 Revenue: 23.86 billion vs. 8.05 billion last year, up 196% growth.
- EPS: 12.20 vs. 8.79 expected. Last year it had $1.41, that’s a massive 756% growth
Q3 (current quarter) guidance:
- EPS: $19 vs. $10.50 expected => This is phenomenal
- Revenue: Around $33.5B vs. $22.4 Billion expected => Massive
Basically, it was a an excellent quarter and phenomenal guidance. The company is seeing unprecedented demand, profit margin and overall growth.
A few key metrics
- Market Cap: $611B
- Trailing P/E: 25.59
- Forward P/E: 5.54
- Price/Sales: 10.57.
- Revenue (Yearly): $58B, Revenue growth: 196%
- EPS: $212.0, Earnings Growth: 770%
- Cash: $14.5B, Debt: $10.8B
- Held by Institution: 82.13%
Strategy
Micron closed last Friday at $542.21, hitting a new all-time high. It’s up about 90% year-to-date from around $285 at the end of 2025. The stock is at its pick. Usually, I am not too keen for a stock around its all-time hight. Having said that, the company is firing on all cylinders. It has almost revenue growth of 200%, 750% earnings growth and the stock is trading at just 5.5 times next years earnings and memory demand is unprecedented due to AI/Data center humongous growth. If we consider these facts then the stock look darn cheap despite the share price appreciation of 90% year to-date. These numbers scream. As my blog readers know, I always buy in small quantities in a phased manner and keep accumulating. When the stock goes up, it’s important for me to take some chips out of the table and book some profits. That’s always part of my strategy. In addition, MU is a growth and volatile stock, hence a little bit of hedging may be important to mitigate/protect from any significant downside. I will keep slowly accumulating as and when I see opportunities.
Risks
The risk is the usual memory one, if AI spending slows or competitors flood the market, it could turn fast. But right now, analysts are raising targets left and right, some even calling for a thousand bucks long-term. And I don’t disagree. If the market goes down or semiconductor sectors gets beaten, Micron may also be hit hard. But that may create even better opportunity to buy for long term. This stock is advisable for the growth investors who can absorb volatility. Otherwise, better to stay away. There is always a risk with any stock, and more so for the growth stock.
My final thoughts
Micron is a growth company and a huge beneficiary of the AI growth. Visualizing its revenue growth, profit growth, high margin, momentum and unpecendent memory demand due to AI explosion, I believe this is a solid pick for a very bullish AI play. This is not a sleepy blue chip company. Despite huge run up in the stock, forward earnings of 5.5 shows it has a long way to go. With that said, if I see any red flag on any of my holding, then I do not hesitate to pull the trigger. But at this time, I think this is one of the best AI stock that I can see in the market with tremendous potential. This is not a recommendation to buy the stock rather my opinion and every investor must do their due diligence.
Some Key Earnings
Alphabet (GOOG): The best earnings among all big tech companies
- EPS: $5.11 vs. $2.63 expected.
- Revenue: $109.9 billion vs $107.2 billion expected
- Google Cloud: $20.02 billion vs. $18.05 billion, up 63% YoY.
- Guidance:CapEx $180 - $190 billion, up from their previous estimate of $175 - $185 billion. The company also said, it sees even more spending in 2027!
Amazon (AMZN)
• Revenue: $181.5B vs. $177.2B expected
• EPS: $2.78 vs. $1.63 expected
Q2 2026 Guidance:
• Revenue: $194B–$199B vs. $189B expected
• Operating income: $20B–$24B.
Microsoft (MSFT)
- Earnings per share: $4.27 adjusted vs. $4.06 expected
- Revenue: $82.89 billion vs. $81.39 billion expected.
- Microsoft’s Azure and other cloud services surged 40%.
- CapEX reduced to 31.9B vs. 34.9B.
- Guidance: $86.7 billion to $87.8 billion vs. $87.53 billion. In-line.
META
- Earnings per share: $7.32 adjusted.
- Revenue: $56.3 billion vs. $55.45 billion estimates.
- Guidance: $58-61 billion in line with estimate
- CapEx: $125-145 billion vs. $115-135 billion => huge increase
- Daily Active Users: 3.56 billion vs. 3.62B. (down)
Carvana (CVNA)
- EPS: Actual $1.69 vs. expected ~$1.49 (beat by ~13%).
- Revenue: Actual $6.43B vs. expected ~$6.01B–$6.10B (beat).
- Other metrics: Record 187,393 retail units sold (+40% YoY), Adj. EBITDA $672M.
Apple (AAPL):
- EPS: $2.01 vs. $1.95 (beat)
- Revenue: $111.18 vs. $109.66 billion (beat)
- iPhone revenue: $56.99 billion vs $57.21 billion expected => slightly miss
- Mac revenue: $8.4 billion vs. $8.02 billion expected (beat)
- iPad revenue: $6.91 billion vs. $6.66 billion expected (beat)
- Wearables, Home and Accessories revenue: $7.9 billion vs. $7.7 billion (beat)
- Services revenue: $30.98 billion vs. $30.39 billion expected (beat)
- Gross margin: 49.3% vs. 48.4%. (beat)
Guidance: June quarter revenue to increase between 14% and 17% from a year earlier. Analysts were expecting growth of 9.5% to $103 billion.
HOOD
- EPS $0.38 (missed $0.39 est.),
- Revenue $1.07B (missed $1.14B est.).
Shesa’s Blog Portfolio (As of MAY 3, 2026)
Equity | Suggested Price | Current Price | Suggested Date | % Change | My View (see disclaimer) |
STOCK (All prices are in USD) | |||||
12.9 | 280.25 | 1/25/13 | 2072% | Buy on Dip | |
47 | 608.75 | 11/13/13 | 1195% | Buy on Dip | |
77.18 | 495.46 | 12/12/13 | 542% | HOLD | |
15.58 | 268.42 | 4/12/14 | 1623% | Buy on Dip | |
13.48 | 127.67 | 11/25/18 | 847% | HOLD | |
54.59 | 202.44 | 5/25/20 | 271% | HOLD | |
23.9 | 198.45 | 2/13/22 | 730% | Buy on Dip | |
290.25 | 390.82 | 5/1/22 | 35% | Accumulate - Long term | |
14.24 | 14.64 | 7/6/25 | 3% | HOLD | |
15.66 | 130.4 | 4/6/23 | 733% | Buy on Dip | |
123.25 | 383.22 | 5/21/23 | 211% | Buy on Dip | |
20.49 | 144.07 | 11/19/23 | 603% | HOLD (Wait - Earnings on 5/4) | |
51.92 | 45.28 | 8/11/24 | -13% | HOLD | |
76.16 | 246.64 | 11/11/24 | 224% | Buy on Dip | |
5.32 | 3.39 | 1/2/25 | -36% | HOLD (Earnings 5/6) | |
37.46 | 46.20 | 2/18/25 | 23% | HOLD | |
203.64 | 421.28 | 4/5/25 | 107% | HOLD | |
11.18 | 33.55 | 6/15/25 | 200% | HOLD - Earnings on 4/8 | |
94.4 | 73.66 | 7/6/25 | -22% | HOLD (Trimmed) | |
104.14 | 119.01 | 8/3/25 | 14% | HOLD (Trimmed) | |
65.47 | 154.49 | 9/7/25 | 136% | Trimmed - Buy on Dip | |
53.95 | 27.41 | 10/12/25 | -49% | HOLD | |
71.56 | 55.01 | 11/9/25 | -23% | HOLD (Trimmed) | |
214.16 | 360.54 | 1/1/26 | 68% | HOLD | |
455.46 | 423.18 | 2/8/26 | -7% | Accumulate slowly | |
85.27 | 68.29 | 3/1/26 | -20% | Accumulate slowly | |
10.86 | 5.36 | 3/29/26 | -51% | HOLD | |
196.99 | 205.95 | 4/4/26 | 5% | Accumulate - Long term | |
542.21 | 542.21 | 5/3/26 | 0% | New Addition | |
MUTUAL FUND | |||||
59.45 | 132.08 | 12/20/14 | 122% | HOLD | |
9.05 | 17.94 | 1/15/16 | 98% | HOLD | |
Equity Sold since my Last Blog
None
Disclaimer: This blog is meant to provide my opinion only. The information provided is to the best of my knowledge but may not be accurate. I do NOT provide any professional recommendation to buy/sell any stock, ETF, mutual fund, or any other security(s). As an investor, it’s your hard-earned money and you decide what is best for you. The above are merely my own opinions on what I do. Please contact a professional money manager to buy/sell any security. I do not charge any fees or commission by writing the blog except anything from Google AdSense. I have position(s) on whatever security I put on my blog portfolio and avoid including any security that I do not own or follow. Anyone buying or selling the equities mentioned here must do at their own risk.
Note: Click on Blog archives to read all my Blogs and updates.
Comments
Post a Comment