Stop me if you’ve heard this before…
Tech stocks exploded higher last week, pulling the S&P 500 Index with them.
You probably said “stop” before I could finish the second half of my sentence, right?
I’m joking, of course.
Tech stocks have been on fire for the past two months, and the move is only accelerating.
The State Street Technology Select Sector ETF (XLK) finished the week up a monster 7% higher. Apart from materials, which were up 2.3%, tech was the only sector to outperform the broader market.
And six out of the 11 sectors were actually down last week…
Given how heavily weighted the American stock market is to technology – and specifically to the AI infrastructure buildout – as goes tech, so goes the market.
That’s neither good nor bad. But it is something you should absolutely keep in mind when looking at your portfolio from the top down.
If you have an S&P 500 index fund – or really any growth fund – in your 401(k), then you’re heavily invested in tech.
That’s great, of course, so long as the bull market continues to rage. But it also means you have to work a little harder to properly diversify.
Buying five to 10 growth funds or ETFs gives you virtually zero diversification if they all own the same core of AI infrastructure stocks that move together.
I’ll have more to say on that in a moment. But first, let’s cover the biggest winners from last week.
Key Insights:
- Tech crushed all other sectors last week, up 7%.
- Six out of 11 sectors actually fell last week.
- As goes tech, so goes the market.
Tech Reigns Supreme
I ran my customary screen of the biggest movers in the sector that were also still within 10% of their 52-week highs last week. The idea is to look for solid, market-leading stocks that are getting stronger.
Here’s what I came up with:
Some of the movements here are so extreme that they look like typos. Dell Technologies (DELL) was up 66.5% on the week and is up big again today.
The company has reinvented itself from a maker of mostly commoditized servers, PCs and laptop computers into a go-to supplier for AI infrastructure.
The company literally cannot make AI servers fast enough. Its backlog continues to grow and finished last quarter at a record $51 billion.
Dell rates “Bullish” in my Green Zone Power Ratings system and particularly well on its momentum, quality and growth factors. But even after the monster run it has had, it rates as “neutral” on its value and volatility factors.
There is always risk in buying a stock that has recently “gone parabolic,” but my system suggests the stock still has some runway left.
Some of the other monster movers should be familiar names by now.
Micron Technology (MU) – up 27% last week – has been part of my Infinite Momentum Tech Titans portfolio since last June, and my readers are now up a monster 715% in the stock. Qualcomm (QCOM) has been a Tech Titan for exactly a month, and it’s already up 31%.
Micron’s 715% move in less than a year creates one of those classic dilemmas for investors. Do I cash out… taking the “sure thing”? Or do I hold out for more, risking that the stock comes back down to earth?
I often struggle with those same questions. But I sleep perfectly well at night with my Micron position.
You see, I rerun the Infinite Momentum model every four weeks, and only the top 10 stocks – the stocks my system has identified as the most statistically likely to outperform over the following four weeks – make the cut.
In a market full of competing narratives, some of the market’s most important shifts don’t make front-page news. That’s why the model is designed to help investors stay focused on what matters most before the crowd catches on.
With that said, I’ll sell Micron, along with every other stock in the Tech Titans portfolio, when my system objectively tells me it’s time to move on. (And if you’d like to better understand the framework I use in Infinite Momentum to navigate today’s market, click here to learn more.)
Is Energy Still Investable?
Energy was the worst-performing sector last week, down close to 5%. Unfortunately, until the Iran war is resolved one way or another, we’re going to continue seeing volatility in energy stocks.
They’re up big one week, down big the next.
So, should we look at the down weeks as opportunities to buy the dip?
Let’s see what my system says…
I ran my customary screen of the sector’s biggest losers for the week that are still trading within 10% of their 52-week lows. The idea is to find beaten-down gems that look poised to recover.
Well, finding energy stocks within 10% of their 52-week low was impossible. Given the run the sector has had over the past year, I had to loosen that criteria. Here’s what I came up with:
There’s a LOT of green here. Of the nine stocks that fell the hardest last week, all but one rated as “Bullish” on my Green Zone Power Ratings system.
We can’t control how emotional traders will react to every breaking news headline about the war. But we can look at the stocks objectively and make rational decisions.
And my system says energy stocks are still a good buy. After technology, which recently took the lead, the sector is the best-performing in 2026, with the State Street Energy Select Sector ETF (XLE) up more than 25% year to date.
To good profits,
Adam O’Dell
Editor, What My System Says Today
