AI-Driven Rally Propels US Stocks to Record Highs

In early June 2026 the Dow, S&P 500 and Nasdaq each closed at record levels, driven by AI-related firms. Hewlett-Packard Enterprise jumped over 30 percent after an AI-focused guidance upgrade; Marvell Technology rose more than 20 percent following Nvidia CEO Jensen Huang’s comment that it could become a trillion-dollar company; memory-chip makers SanDisk and Micron posted YTD gains of 600 percent and 1 000 percent.

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Morningstar’s March-30 outlook advised overweighting growth—particularly technology and AI—while underweighting value, especially energy. By May-end the Morningstar US Growth Index had risen 21.26 percent versus a 3.52 percent gain for the value index. Growth stocks now trade at a 5 percent discount to Morningstar’s fair-value model, down from a 19 percent discount in March; value stocks sit at a 6 percent discount. CFRA and Goldman Sachs flagged many commodity-oriented AI hardware stocks as overvalued despite short-term supply shortages.

US Stock Market Outlook Update: Harvesting Growth Gains, Restoring Barbell

• Morningstar US Growth Index: +21.26 % (Mar 31–May 29)

US Stock Market Outlook Update: Harvesting Growth Gains, Restoring Barbell

• SanDisk (SNDK): +600 % YTD, +4,500 % 12-month gain

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• Micron Technology (MU): +1,000 % YTD, market cap $1 trillion

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Morningstar recommends a “barbell” portfolio—half growth, half value—to capture AI upside and limit volatility. The firm notes growth equities have a modest margin of safety and undervalued energy offers defensive balance. Goldman Sachs’ chief executive described the market mood as “more greed than there is fear” amid the AI surge.

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CFRA analyst Angelo Zino warned that “those areas of the market that are seeing the greatest bottlenecks also have the greatest potential upside to pricing,” suggesting current spikes may be temporary. Goldman Sachs downgraded several software names, arguing the AI boom has “greatly exaggerated” earnings expectations. Analysts caution AI-related hardware could lose its edge as supply eases.

US Stock Market Outlook Update: Harvesting Growth Gains, Restoring Barbell

Morningstar’s models place growth equities at a modest 5 % discount, implying relative undervaluation, while CFRA and Goldman Sachs label many AI hardware stocks as overvalued. The divergence reflects differing assumptions about AI-driven demand versus short-term supply.

US Stock Market Outlook Update: Harvesting Growth Gains, Restoring Barbell

• “more greed than there is fear,” — Goldman Sachs CEO

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• “Those areas of the market that are seeing the greatest bottlenecks also have the greatest potential upside to pricing.” — Angelo Zino, CFRA analyst

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• “has had a great run, but there’s going to just be tremendous demand for the memory product to further support the development of AI applications,” — Rob Thummel, Tortoise Capital manager

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• “In terms of news, Jensen Huang stated at the Computex conference that Marvell has the potential to become the next public company with a market capitalization exceeding $1 trillion, adding that it plays a crucial role in large-scale AI data center interconnect infrastructure systems.” — Jensen Huang, Nvidia CEO

US Stocks Close: Three Major Indexes Hit Record Closing Highs, Optical Communication Stocks Lead Gains, Marvell Technology Jumps Over 32%

Upcoming mega-IPOs—SpaceX, Anthropic, OpenAI—are expected to add float-adjusted weight to major indexes, shifting sector exposure toward technology. Heightened Middle-East tension keeps oil prices elevated, sustaining inflation pressures and limiting Federal Reserve rate cuts. Morningstar’s barbell recommendation remains unchanged: capture AI-driven upside in growth stocks while rotating into undervalued value positions as market volatility persists.

US Stock Market Outlook Update: Harvesting Growth Gains, Restoring Barbell