Rotation Carries the Bull: Semis to Software
Weekly Outlook 06/01/26
Market Recap
Last week we closed on the Iran framework deal gapping the market to fresh highs, with the digestion resolving to the upside. This week extended that strength into a ninth consecutive weekly gain, and it came in a holiday-shortened four-day week after Memorial Day. The S&P 500 closed Friday at 7,580, the Dow at 51,032, and the Nasdaq at 26,973, with all three printing fresh all-time intraday highs along the way.
There were a few macro news to note which was mostly ignored by the market - fresh US “self-defense” strikes on Iran over the long weekend, April PCE at 3.8% year-on-year (the hottest in nearly three years), University of Michigan sentiment at a record low, and yet another Axios peace deal report that briefly knocked WTI below $90 before it climbed back. The tape priced all of it as noise and kept grinding higher.
Under the surface there was real rotation. Semis ran six days in a row before a sharp pullback on Wednesday, then went sideways into the end of the week to digest the move. $MU stood out, picking up a fresh price target at nearly double its current level. Then late in the week the rotation shifted hard into software, with $IGV catching a bid sparked by a bullish earnings report and a gap up in $SNOW.
The standout in AI infrastructure was $DELL, which surged 33% on Friday for its best day on record after a blowout quarter. Revenue came in at a record $43.8 billion, up 88% year-on-year, with non-GAAP EPS of $4.86, up 214%. AI-optimised server revenue exploded 757% to $16.1 billion, and the company booked $24.4 billion in AI orders on the quarter. Management raised full-year guidance to roughly $167 billion at the midpoint, up nearly 50% year-on-year, and lifted its FY27 AI server revenue outlook to $60 billion. The print reframes Dell as a core AI infrastructure name rather than a legacy hardware story.
Catalysts Over the Last Week
Some notable catalysts to be aware of from last week:
Space (Blue Origin): A Blue Origin accident rattled the space complex late in the week, with Bezos confirming no personnel injuries but sympathy names taking the hit.
SpaceX IPO: The road show is on track to begin in the coming weeks, keeping the whole space sector bid into the listing.
SpaceX valuation: Reports circulated that the target was cut from $2T toward $1.8T, though Elon publicly refuted the claims on X.
Drones: The Trump administration is reportedly weighing direct funding and potential equity stakes in domestic drone makers to cut Chinese component dependence.
Watchlist
It’s been a fairly diverse momentum market with new catalysts emerging every week, far too many to fit in one post. If you want to keep track of every setup I’m watching and catalysts as they hit in real time, that all lives over in the Valhalla Portal as well as the discord.
Semis
$NVDA | The Vera CPU announcement is the story with NVDA now stepping directly into the CPU and PC market, and the stock is firmly in play.
$ARM, $AMD, $INTC | The open question into next week is whether the incumbents take any heat from NVDA’s entry, or whether the CPU pie simply expands. Worth watching how each trades relative to the headline.
AI Infrastructure / Data Centers
$DELL | Post-earnings gap is the setup. Watching for whether it enters a constructive digestion period like $AMD and $CSCO did recently after their own gaps, rather than chasing the move.
$CRWV | Dell tweeted about the first Rubin datacenter rack, which could spark fresh momentum across the group. $CRWV looks poised for a rally, especially off Friday’s strong close.
$NBIS | The Aschenbrenner stake adds fuel and the chart looks ready for new all-time highs.
Drones
Fresh theme off the Trump administration’s domestic drone funding plans.
$UMAC | At all-time highs and the named primary beneficiary, looking like the clear sector leader.
$ONDS | Trading on huge volume and pressing right up against all-time highs.
$RCAT | On watch as the sympathy name in the group.
Software
Last week’s rotation into software is worth tracking to see if it has legs.
$MSFT | Just broke out of a multi-week consolidation - a breakout we flagged and entered a position in on Friday.
AKAM 0.00%↑ TWLO 0.00%↑ have been consolidating post earnings and could be trends to join if software remain strong.
Cybersecurity | Many names have been extremely strong but aren’t really actionable here given how extended the rallies are.
Space
$SPCE | Seeing WallStreetBets activity and shaping up as the meme squeeze vehicle of the sector. Trading high volatility with a wide range, an active ticker in play.
$FJET | On watch in the broader space complex.
$ASTS, $RDW, $RKLB | All gapped down on the valuation rumors but bounced back, holding up well.
Nukes
$IMSR, $SMR, $OKLO | The nuclear complex started seeing some constructive action last week with potential to start breaking its downtrends.
Quantum
$QBTS, $RGTI, $INFQ, $IONQ | After digesting the initial leg up last week, these also look poised for potential breakouts.
Closing Thoughts
The market remains strong. Even with semis pulling back this week, money rotated straight into other corners of the tape, which is exactly the behaviour you want to see in a healthy bull market. There’s movement everywhere right now, from small caps to mid caps to large caps, and the charts broadly look like they could have another leg up from here.
The one thing worth watching in the coming weeks is the SpaceX IPO. Given the sheer size of the listing, there’s a real chance it pulls liquidity out of the rest of the market as capital rotates in, which could act as a short-term pullback catalyst. Worth keeping on the radar, but nothing that changes the constructive picture heading in.
If you enjoyed this read, please consider leaving a like on the post, and let me know in the comments if I missed anything or what you’re watching for this week!
P.S.
If you haven’t checked out the Valhalla Portal yet, it’s where I track catalysts, setups, and market activity in real time - a live feed of everything that moves the tape, built for the community. I’ll be doing a dedicated post soon walking through all the features in detail, so stay tuned for that. In the meantime, you can check it out here: