These two AI dominators are poised to lead the market higher

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Today’s issue in preview:

• These two AI dominators are poised to lead the market higher

• The most important stock market story the media won’t cover

• The financial liquidity spigots are open: Key banking giants reach new highs

• Learn our Top Themes to buy now

These two AI dominators are poised to lead the market higher

Credit: BING-JHEN HONG

Over the past six months, the media has featured a steadily increasing number of articles about public resistance to AI and AI data centers.

Read enough of these articles and you might think this resistance will slow AI progress and adoption.

But what does the market – which knows far more about the future of AI than the masses and their media outlets – say about the future of AI?

One look at the trends in ASML (ASML) and Taiwan Semiconductor (TSM) provides us with a clear answer: Full speed ahead.

ASML and TSM are two of the most essential companies on the planet. They couldn’t be any more “mission-critical” players in the AI infrastructure boom.

ASML – which originally stood for Advanced Semiconductor Materials Lithography – is the only company in the world that can currently create Extreme Ultraviolet Lithography (EUV) Machines at scale. These EUV machines are used by semiconductor makers to build the world’s most advanced AI chips.

This is the highest of high-tech manufacturing. EUV machines are among the most complex, value-creative machines ever made… and their price tags reflect that. Modern EUV machines sell for over $300 million apiece. That’s a price range typically reserved for U.S. Navy contractors and the builders of mega yachts.

Taiwan Semiconductor is the world’s largest AI semiconductor chip maker… so it’s no wonder it is also the world’s largest buyer of EUV machines. It uses EUV machines to build advanced AI chips for companies such as Nvidia and Apple.

In other words, the AI boom hinges on ASML and TSM. Both companies are experiencing world-class growth and enjoying incredible customer demand. TSM recently reported 40.6% year-over-year quarterly revenue growth. ASML recently reported 13% year-over-year quarterly revenue growth.

As you can see in the two-year chart of ASML, the AI megatrend is doing just fine. ASML is up 69% YTD, is in an orderly uptrend, and is very close to its all-time high. TSM – seen below the ASML chart – is trading in essentially the same pattern.

Will the AI Boom eventually suffer a vicious correction or even a prolonged bear market? Of course. All trends go through corrections. All trends eventually end. But for now, it’s boom times for AI.

The tremendous price strength of ASML and TSM – two mission-critical players in the AI boom – tell us yet again that the AI bears are wrong… and it’s smart to be long the largest collective investment effort of all time. I’m still bullish on both stocks and AI infrastructure in general.

The most important stock market story the media won’t cover

Credit: Marian Vejcik

In the mainstream media’s pursuit of running alarming, negative articles about wars, conflicts, disasters, and scandals it knows we will click on, we often hear how consumer sentiment is terrible… and perhaps the average American consumer is “tapped out.”

But what does the market say about the state of the American consumer?

Today’s market prices are the sum total and current manifestation of all knowledge held by industry insiders, connected money managers, government officials, and bankers who quietly control huge swaths of the economy. These people know 50 times more about their industries of focus than you or I do.

Their knowledge manifests itself through action… and that action sets market prices. Market prices are not always perfect, but most of the time, they know heck of a lot more than any economist, podcaster, X poster, or investment guru.

If you ever get brain overload from listening to or reading lots of “experts” espousing conflicting opinions about a war, a technology, or the health of the economy, you can easily tune them out and focus on signals that contain more distilled insider knowledge in them than all those experts combined: Market prices.

Over the past six months, I’ve detailed how the market is consistently telling us that the American consumer is actually doing quite well. Consumers have spent money with such enthusiasm here in 2026 that shares of the two giant shopping mall operators – Simon Property Group (SPG) and Macerich (MAC) – have both reached new all-time highs this year.

Today, we “round out” our evaluation of the American consumer by studying the price action of the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD).

RSPD is one of my favorite ways to gauge the health of the U.S. consumer.

This ETF is full of consumer spending stocks of all types. Its holdings include Carnival Cruise Line (CCL), Chipotle Mexican Grill (CMG), Marriott International (MAR), Ulta Beauty (ULTA), General Motors (GM), Airbnb (ABNB), Lululemon Athletica (LULU), Expedia Group (EXPE), Amazon (AMZN), Home Depot (HD), Nike (NKE), Starbucks (SBUX), Ford Motor (F), Ralph Lauren (RL), and Hasbro (HAS).

It’s an equal-weight fund, so no one dominant company skews returns.

Plus, the companies above serve a big swath of mid-to-upper-level consumers. It’s not heavily reliant on ultra-wealthy spending… or “ultra-poor” spending. Companies in this fund serve good old-fashioned red-white-and-blue American consumers – the ones who drive $90,000 Chevy Suburbans, go on $5,000 Caribbean cruises, drink $6 lattes, and wear $100 leggings.

As you can see in the three-year chart below, RSPD is in the midst of a clear, multi-year uptrend.

Shares of RSPD are up 24% over the past three years, so this sector isn’t exactly “screaming higher.” The broad market is up 77% over the same time.

However, this uptrend lets us know that the American consumer is doing much better than pessimists would like you to believe.

I’ve been investing and reading financial research for 28 years. During all that time, I’ve heard many famous pessimists forecast the death of the American consumer. Well, not even the dot.com crash or the 2008 financial crisis could knock it out. This is why I say that in the event of global thermonuclear war, two things will survive. Cockroaches and the American consumer.

As an investor, you can base your decisions on bearish stories written by journalists who don’t know much about making money in stocks. You can base your decisions on forecasts issued by professional pessimists who predict nothing but doom and gloom.

Or, you can focus on reality. You can focus on what’s happening in the real world. Right now, reality says RSPD is in an uptrend, and the consumer is doing just fine.

Market Notes

• International banks HSBC (HSBC), Royal Bank of Canada (RY), Mizuho Financial (MFG), and UBS (UBS), reached new all-time highs today. These are bullish market signals.

• Our March 27 recommendation to own cybersecurity stocks is paying off. Large-cap cyber company Fortinet (FTNT) and smaller cap Radware (RDWR) both hit new highs today. FTNT is now up 62% over the last year.

• Our November 17 recommendation to own biotech is doing well. 10X Genomics (TXG), Edgewise (EWTX), and UroGen (URGN) all hit new highs today. TXG is now up 238% in the last year alone.

• Lubricant giant WD-40 Company (WDFC) just released strong earnings, and the stock is up 22% today.

• Oil refining giants Valero (VLO) and Marathon Petroleum (MPC) reached new three-month highs today thanks to the resumption of armed conflict in Iran.

Regards,

Brian Hunt
Editor, Money & Megatrends

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