Published on May 18, 2026

May Monthly Portfolio Pulse - AI Acceleration

Strong Q1 earnings growth—far exceeding expectations—has shifted investor focus away from geopolitical risks, supported by a resilient U.S. consumer and accelerating AI investment as a key driver of economic and market momentum.

Written by Dan Phillips, CFA®

May Monthly Portfolio Pulse - AI Acceleration

Q1 earnings season successfully distracted investors from the ongoing stalemate over the Strait of Hormuz and refocused their attention on what is a very impressive fundamental backdrop. Aggregate Q1 earnings growth across the ~90% of S&P 500 companies that have reported thus far has clocked in at a ~25% year-over-year growth rate, racing past investor expectations by ~18%. Providing an economic foundation is the U.S. consumer – aided by two consecutive months of jobs growth and billions of tax-refund dollars in their pockets. But the true accelerant is the expanding AI buildout, which we conservatively estimate to be ~$1 trillion in 2026 (~3% of total U.S. economic output) and to which we recommend increasing investment-portfolio exposure.

Click to read: May Monthly Portfolio Pulse - AI Acceleration