THE LAST TRADING DAY OF MAY, S&P HITS ALL TIME HIGHS | MARKET CLOSE

SUMMARY

Amit Kukreja hosts a detailed review of the final trading day of May, highlighting the S&P 500's record highs, sector-wide participation, and a dramatic end-of-day volatility attributed to index rebalancing. Special guest Matt Money joins to discuss space stocks, portfolio strategy, and the broader implications of recent market moves.

MAIN POINTS

• Multiple sectors, including software, fintech, and airlines, participate in the market rally as the S&P 500 reaches all-time highs. [2:00]
• Late-day volatility emerges as Nvidia and other tech stocks experience sharp price swings, possibly due to end-of-month rebalancing. [5:00]
• Significant market cap shifts occur within minutes, with Nvidia losing $125 billion and Microsoft, AMD, and Broadcom gaining rapidly. [11:00]
• Despite volatility, many stocks such as Robinhood, Palantir, and Dell close with strong gains, while semiconductors remain resilient. [16:01]
• Year-to-date portfolio returns are discussed, with many investors outperforming the S&P 500, driven by gains in Reddit, Shopify, Oracle, and AMD. [19:00]
• Community members share their biggest winners and losers, with AMD, Nebius, and Micron leading gains and SoFi and BMR lagging. [23:02]
• Discussion centers on the importance of beating the S&P 500 benchmark and the role of risk management in portfolio construction. [27:00]
• Guest Matt Money joins, reflecting on Rocket Lab's meteoric rise and the broader investment thesis for space-related companies. [32:00]
• Rocket Lab's integrated manufacturing and subcontracting strategy is analyzed as a key differentiator in the expanding space sector. [39:00]
• SpaceX's anticipated IPO and its impact on valuations across the space industry are debated, with caution about high price-to-sales multiples. [44:00]
• Matt Money discusses portfolio concentration in Rocket Lab, risk tolerance, and the decision to hold through volatility for long-term gains. [47:00]
• The conversation shifts to market psychology, imposter syndrome, and the rewards of holding high-conviction positions through cycles. [52:00]
• Capex supercycles in tech are examined, with expectations of continued investment in AI infrastructure by major hyperscalers. [56:01]
• Microsoft's strategic positioning and capital allocation are highlighted as reasons for recent large purchases during market dips. [1:02:00]
• Crypto market cycles are reviewed, with expectations for a rebound in the second half of 2027 following the current 'crypto winter'. [1:04:01]
• Energy sector investments, particularly in LNG exporters like VG and NextDecade, are discussed as part of a diversified strategy. [1:07:00]
• Space sector dynamics, including the impact of Blue Origin's launch failure and competition among Rocket Lab, AS, and others, are explored. [1:11:00]
• Meta and other tech giants are analyzed for their evolving business models, ad strategies, and user engagement metrics. [1:19:02]
• Rapid-fire opinions are given on Oracle, Nike, ServiceNow, Symbotic, Google, Amazon, Zeta, Palantir, and other stocks. [1:24:00]
• Matt Money addresses the prospect of leaving his day job, emphasizing personal fulfillment and the importance of helping others. [1:27:03]

DETAILED ANALYSIS

The final trading day of May saw the S&P 500 reach new all-time highs, driven not just by the dominant semiconductor sector but by a broad rally across multiple industries. Technology giants such as Microsoft, Oracle, and Shopify posted significant gains, while software and fintech names like ServiceNow, Palantir, and Robinhood also surged. The breadth of participation is notable, as it signals a shift from a previously narrow market led by a handful of mega-cap stocks to a more inclusive rally.

This diversification is considered healthy for market stability, reducing the risk of over-concentration in a single sector.

Late in the session, the market experienced dramatic volatility, particularly among large-cap technology stocks. Nvidia, which had been trading near its highs, saw a rapid decline of over $125 billion in market capitalization within minutes, while Microsoft, AMD, and Broadcom simultaneously posted sharp gains. The timing and scale of these moves suggest that end-of-month index rebalancing played a significant role, as institutional investors adjusted their portfolios to reflect new weightings.

Headlines regarding US-Iran negotiations surfaced but were deemed insufficient to explain the magnitude of the swings, reinforcing the rebalancing theory.

Despite the turbulence, many stocks closed at or near their highs for the month. Robinhood, in particular, benefited from news that public sector groups are exploring partnerships to create white-label versions of 'Trump accounts' for newborns, potentially opening a significant new line of business and increasing assets under management. Palantir, Dell, Zeta, and SoFi also delivered strong performances, while semiconductor ETFs like SMH remained stable, indicating that the sector rotation did not come at the expense of chipmakers.

Investor sentiment, as measured by the Fear & Greed Index, remained moderate despite record highs, reflecting the broader market participation. Year-to-date performance among retail investors was robust, with many reporting gains well above the S&P 500's 10% return. Standout winners included Reddit, Shopify, Oracle, AMD, Nebius, and Micron, while laggards such as SoFi, BMR, and Grab were discussed in the context of portfolio management and opportunity cost.

The importance of risk management and the discipline to let losers remain small while reallocating capital to higher-conviction ideas was emphasized.

The episode featured a special guest, Matt Money, who provided in-depth analysis of the space sector. Rocket Lab's extraordinary rise from $4 to over $150 per share was dissected, with attention to its unique position as both a launch provider and an integrated manufacturer supplying components to a wide range of space missions. The company's strategy of acquiring and integrating disparate businesses has enabled it to become a key subcontractor across the industry, differentiating it from competitors like SpaceX.

The discussion highlighted the potential for Rocket Lab to capture a significant share of the expanding total addressable market in space, with the possibility of its valuation exceeding $200 billion if sector growth meets expectations.

SpaceX's anticipated IPO and its speculative $1.8 to $2 trillion valuation were debated, with caution advised regarding high price-to-sales multiples. The ripple effect of SpaceX's valuation on other space companies was acknowledged, as investors seek exposure to the sector's growth. Matt Money described his personal portfolio strategy, which includes a substantial allocation to Rocket Lab—amounting to half his net worth—and a willingness to accept volatility in pursuit of generational wealth.

The psychological challenges of holding large, high-conviction positions were discussed, including imposter syndrome and the difficulty of deciding when to take profits versus letting winners run.

Broader market themes included the ongoing capital expenditure supercycle in technology, driven by hyperscalers like Microsoft, Amazon, and Google investing heavily in AI infrastructure. The consensus is that this investment cycle has at least another 12 to 24 months to run, with the potential for continued earnings growth and market leadership. The conversation also touched on the cyclical nature of the crypto market, with expectations for a rebound in 2027 after the current period of stagnation.

Energy investments, particularly in LNG exporters like VG and NextDecade, were highlighted as part of a diversified approach. The importance of understanding business cycles and balancing risk across sectors was underscored. In the space sector, recent setbacks such as Blue Origin's failed launch were weighed against the overall momentum, with Rocket Lab and AS positioned as key beneficiaries of increased government and commercial spending.

Meta's evolving business model, including new features like Instagram 'instants' and increased ad personalization, was analyzed alongside concerns about user engagement and regulatory challenges. Other stocks, including Oracle, Nike, ServiceNow, Symbotic, Google, Amazon, Zeta, and Palantir, were reviewed in a rapid-fire format, with generally bullish sentiment on technology and automation leaders.

The episode concluded with reflections on career choices, personal fulfillment, and the role of content creation in the investing community. Matt Money discussed the balance between his day job and his passion for helping others through financial education, emphasizing the value of community and long-term thinking. The broader message is one of resilience, adaptability, and the importance of maintaining a disciplined, research-driven approach in a dynamic market environment.

LINKS

• Amit Kukreja's Twitter/X profile for market commentary and updates.
• Amit's Deep Dives Substack for in-depth stock and market analysis.
• Link to sign up for the Singapore meetup event.

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