Intel is the latest beneficiary. The company, long treated as the aging uncle of the chip industry, surprised investors with AI-supported results. Its shares jumped sharply after hours and were set for what could be a record gain. German software group SAP offered a similar message from a different angle. Its shares climbed after it showed that its cloud business is still growing strongly. Its cloud backlog rose 25% at constant currencies, slightly ahead of expectations. This comes after software companies have recently been punished by investors worried that AI may reduce the value of traditional enterprise software. SAP's results suggested that, at least for now, customers are not walking away from the old systems. They are trying to bolt AI onto them and hope the whole thing does not become an expensive filing cabinet with opinions.

The shape of the AI trade in 2026 remains strange. It began with the obvious giants: Microsoft, Alphabet, and the other hyperscalers with enough cash, data, and computing power to turn AI from a clever demo into a global business. Then investors chased the suppliers: the Nvidia and Broadcom phase. Then they went after the suppliers' suppliers: ASML, TSMC, Applied Materials. Then came the second-order beneficiaries: server makers, data-center operators, electrical-equipment companies, utilities, memory-chip producers, and connectivity firms. In other words, AI has gone from being a product story to an infrastructure story. That is why the word "supercycle" keeps coming up.

The term is overused, but not useless. A true economic supercycle needs two things: size and duration. The size is no longer in doubt. The capital spending is enormous. Data centers, chips, power systems, networking equipment, cloud platforms: this is no small corporate fad being funded from leftover marketing budgets. The duration is the open question. Three and a half years after ChatGPT introduced mass-market AI to the public, the investment wave is still rolling. But whether it lasts long enough to justify today's stock prices is the question investors are trying to answer with very expensive enthusiasm.

Oracle shows why that may be risky. Its enormous data-center deal tied to OpenAI - roughly $300 billion - has run into financing challenges. Banks are reportedly struggling to spread the loans around because they are already near exposure limits. The AI boom needs chips, energy, land, cooling systems, electricity, and lots of debt.

There are also social costs that markets have not fully priced in. Meta recently offered a glimpse of where it thinks work is going: humans training and supervising AI systems that may eventually replace the tasks those humans used to perform. Across the technology sector, job cuts are becoming more visible. Nike, though not a tech company, is also cutting about 1,400 workers, or roughly 2% of its workforce. The broader point is hard to miss: companies are still trying to protect margins, even as investors celebrate growth.

For now, the AI supercycle is stronger than its side effects. That does not mean the side effects are imaginary. Software stocks have already been hit by fears that AI will weaken business models once considered safe. Entire industries are being forced to ask whether their barriers to entry were ever real, or merely convenient. The market is not blind to this, but it is simply choosing to look past it because the money flowing into AI infrastructure is larger, louder, and more exciting.

Meanwhile, oil is rising for a fifth straight day, with Brent above $105 a barrel, as the Middle East conflict continues to strain markets. A third U.S. aircraft carrier has arrived in the region, giving Donald Trump more military power to enforce the blockade of Iranian ports and potentially resume strikes. Reports of an Iranian ship being chased by a U.S. destroyer underline how fragile the situation has become.

In corporate news, DeepSeek, the Chinese AI lab, has launched preview versions of its long-awaited V4 model, claiming big improvements in agentic coding. The company says the model is now its internal go-to coding agent and compares favorably with some leading Western models in user experience, though it still trails the strongest "thinking" modes. The AI race is not slowing, and it is not confined to Silicon Valley.

Avis Budget has been crushed, falling sharply after a two-day collapse. Boyd Gaming disappointed investors, while Carlisle and Chemed pleased them. Spirit Airlines found itself in the middle of an extraordinary political-business story, with Trump saying the government could bail out or even buy the struggling carrier.

Today's economic highlights:

See the full calendar here.

  • Dollar index: 98.775
  • Gold: $4,689
  • Crude Oil (BRENT): $106.75 (WTI) $97.18
  • United States 10 years: 4.33%
  • BITCOIN: $77,731

In corporate news:

  • UnitedHealthcare, Humana and CVS Health will reportedly adopt a single standard next year for healthcare providers requesting pre-treatment reviews.
  • Intel shares surged after stronger-than-expected Q1 results and an upbeat Q2 outlook, with AI-related CPU demand and a reported Tesla foundry win boosting turnaround hopes.
  • Comfort Systems USA shares rose after the company beat Q1 earnings and revenue expectations.
  • WTW signed a three-year global insurance sponsorship deal with Ineos Grenadiers.
  • Newmont reported higher Q1 adjusted earnings and revenue, reaffirmed its 2026 gold production outlook and approved an additional $6 billion share buyback.
  • Palantir faces pressure from Minneapolis campaigners urging the Swiss National Bank to sell its $1.1 billion stake over the company's role in U.S. immigration enforcement technology.
  • Goldman Sachs was reportedly hired by Princeton Digital Group for a strategic review that could lead to a stake sale.
  • Tesla has started production of its Cybercab autonomous taxi at Giga Texas, according to Elon Musk and company posts.
  • White House officials accused Chinese entities of large-scale theft of U.S. AI technology, raising tensions around Nvidia chip exports and U.S.-China tech relations.
  • DeepSeek previewed a new AI model adapted for Huawei chip systems, highlighting China's push to reduce reliance on Nvidia hardware.
  • KKR and Capital Group reportedly plan to launch a public-private credit fund in Asia in the second half of the year.
  • Microsoft reportedly offered early retirement to thousands of long-serving employees
  • Nike plans to cut about 1,400 jobs
  • Warner Bros Discovery shareholders approved the proposed $110 billion merger with Paramount Skydance, though they opposed executive pay packages tied to the deal.
  • Pershing Square reportedly plans to offer up to 33.12 million shares in its IPO, while Nike, Spirit Airlines and other companies featured in the Wall Street Journal's business digest.
  • Apple, Alphabet and Meta could be affected after Donald Trump threatened a “big tariff” on the UK unless it drops its digital services tax targeting major U.S. tech firms.
  • The FDA declines to approve AbbVie's anti-wrinkle treatment.
  • Trump says he is "considering" buying Spirit Airlines.
  • Accenture announces an investment in Iridius.
  • Lockheed Martin confirms Peru's purchase of F-16 fighter jets.
  • Today's main releases: SLB, Norfolk Southern Corporation, Charter Communication, ENI, Holcim, Kuehne und Nagel, Telia, Yara...

Analyst Recommendations:

  • Freeport-Mcmoran Inc.: Morgan Stanley downgrades to market weight from overweight and reduces the target price from USD 70 to USD 66.
  • Ibm: DZ Bank AG Research upgrades to buy from hold and raises the target price from USD 285 to USD 295.
  • Intel Corporation: CTBC Securities Investment Service Co LTD upgrades to add from neutral and raises the target price from USD 53 to USD 80.
  • Kyndryl Holdings, Inc.: Scotiabank upgrades to sector perform from under review with a target price of USD 16.50.
  • Phillips 66: Morgan Stanley upgrades to overweight from equalwt and raises the target price from USD 147 to USD 174.
  • Sandisk Corporation: GF Securities Co. Ltd. upgrades to buy from hold with a price target raised from USD 604 to USD 1277.
  • Southwest Airlines Co.: HSBC upgrades to hold from reduce and raises the target price from USD 24.40 to USD 36.10.
  • Tesla, Inc.: DZ Bank AG Research upgrades to hold from sell and reduces the target price from USD 400 to USD 385.
  • Amd (Advanced Micro Devices): KGI Securities Co Ltd maintains its outperform rating and raises the target price from USD 285 to USD 360.
  • Floor & Decor Holdings, Inc.: JP Morgan maintains its neutral recommendation and reduces the target price from USD 78 to USD 48.
  • Ge Vernova Inc.: Goldman Sachs maintains its buy recommendation and raises the target price from USD 1000 to USD 1328.
  • Kinsale Capital Group, Inc.: Cantor Fitzgerald maintains its neutral recommendation and reduces the target price from USD 360 to USD 280.
  • Molina Healthcare, Inc.: Barclays maintains its underweight recommendation and raises the target price from USD 133 to USD 161.
  • Servicenow, Inc.: CMB International Capital Corp Ltd maintains its buy recommendation and reduces the target price from USD 215 to USD 160.
  • Texas Instruments Incorporated: GF Securities Co. Ltd. maintains its buy recommendation and raises the target price from USD 220 to USD 270.
  • United Rentals, Inc.: Bernstein maintains its outperform rating and raises the target price from USD 903 to USD 1153.
  • Valero Energy Corporation: Morgan Stanley maintains its equalwt recommendation and raises the target price from USD 182 to USD 222.
  • West Pharmaceutical Services, Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 295 to USD 365.