Don’t you just love it when a plan comes together? On my Sunday Market Brief I said that this week would decide whether the rally was still on. It’s on.
You know what they say, a rising tide lifts all boats. Yesterday proved it as the stock market rallied on positive earnings across big tech. Anything around AI, semiconductors, data centers, and AI-powered software is in play.
The Big Picture
I’ve been talking about how strong this market is for weeks. But I also knew this rally hinged on whether Wall Street loved or hated numbers from five of the Mag 7 reporting this week. They’re the backbone of this entire rally. They’re the driver right now.
- Alphabet (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), and Microsoft (MSFT) reported on Wednesday (April 29).
- Apple (NASDAQ: AAPL) reported yesterday (April 30).
All five beat earnings expectations.
Even though there was mixed reaction to the individual stocks because of increased AI-related capex, the market absolutely loves where all that money is flowing.
So much for the doom-and-gloomers who keep calling it an AI bubble.
Yesterday the Nasdaq and S&P 500 closed at record highs after their best month since 2020. The Dow closed up +790 points.
Folks, this rally is on. That’s great news for those of us who day trade low priced stocks. The higher the major indexes go, the more people want to put money into the markets.
And the higher big tech goes, the more opportunity we have to trade small tech company stocks. Big tech and frontier AI companies spend money building data centers, buying compute, and training new models.
Small companies building AI-powered software spend more money to build. Businesses buying the end-products spend more to increase productivity. This is what capitalism is all about.
For traders, it means more small company stocks are gonna get more attention.
Now, that doesn’t mean you should invest in these small companies. If you want to invest, invest in real companies.
But for trading, it’s game on. Expect to see absolute bangers across AI related stocks, chip stocks, quantum stocks, and anything else until there’s a meaningful pullback.
My Take
I’ve been bullish on this market for weeks. Ever since urban-gro, Inc (NASDAQ: UGRO) went crazy the last week of March. That was the perfect run to get things going in small caps. But this overall market rally is bigger than that. There are opportunities galore. Remember, trade ‘em, don’t date ‘em.
Watchlist
Someone asked yesterday if it was “too late” to buy GOOGL. Oh, boy.
Let me just say that I’ve been calling GOOGL since last year. It was my #1 stock for 2026. I was bullish in the $280s. That was around the time Warren Buffet and Berkshire Hathaway bought first stake.
Are you too late? You probably want to wait for a pullback on something running like this:
Source StocksToTrade GOOGL, 1-year, daily candle
That’s about as clean a breakout as you’ll see on a higher priced stock. I’m still bullish because I think Alphabet will pull a rabbit out of the hat. They might just win the AI race.
Plus, they’re fully in the fight with the TPU versus GPU argument. I can’t say if you’re too late, but I’m bullish.
On My Radar
- Apple sales topped $111 billion in Q2. Now if they could only produce more Mac Studios so I can ramp up my AI agent, Higgins
- Classic but good to read if you want to understand the big picture: The Intelligent Investor by Benjamin Graham. That’s who Buffett learned from.
- The robots are coming and it won’t be long: LG and NVIDIA are exploring a partnership.