Wall Street entered May with a distinctly upbeat tone after the S&P 500 briefly moved above 7,200 and logged its strongest month since November 2020, helped by a softer inflation backdrop, falling oil and a fresh wave of big-tech earnings strength. Apple and SanDisk did much of the heavy lifting, while the market also drew support from signs that geopolitical risk in energy is easing. Apple’s latest quarter, reported after Thursday’s close, showed revenue of $111.2 billion and earnings per share of $2.01, both ahead of expectations, according to Axios and Reuters, while the company also unveiled a new $100 billion buyback and lifted its dividend. SanDisk, meanwhile, delivered a sharply better-than-expected update that underscored how quickly the memory trade has been re-rated around artificial intelligence demand. According to the company’s filing, revenue came in at $5.95 billion and non-GAAP gross margin reached 78.4%, a combination that sent the shares higher over the past month.

Apple’s results were broad-based, with all major product lines posting year-on-year gains, even as the company acknowledged some supply bottlenecks. Reuters reported that Tim Cook said iPhone demand was “off the charts”, while Axios noted that the next chief executive, John Ternus, is due to succeed him in September. Separately, PC Gamer reported that Cook also flagged strong demand for the MacBook Neo and said production was being increased, although rising memory costs could weigh on margins later. The broader message from Apple is that consumer demand has held up far better than many investors feared, giving the market another reason to extend its rally.

SanDisk’s surge added a different but equally powerful theme: the AI infrastructure build-out is not just about chips and cloud spending, but also storage. In its latest results, the company said datacentre revenue rose 64% sequentially, with chief executive David Goeckeler describing the business as undergoing a shift in customer mix and pricing power. That is consistent with the stronger margin profile highlighted in the investor presentation, and with the market’s willingness to reward companies that can show direct exposure to enterprise AI deployments rather than just general technology demand.

Elsewhere, oil prices eased as reports pointed to de-escalation in the Middle East, helping to dampen some of the pressure on inflation expectations and risk assets. Bloomberg also reported that the Pentagon has signed deals to bring classified-network AI capabilities from NVIDIA, Amazon Web Services and Microsoft, reinforcing the idea that federal spending could become another durable pillar of the AI trade. Put together, the combination of strong earnings, lower energy prices and continued AI capital expenditure has given equities an unusually favourable start to May, even after a powerful April run.

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Source: Noah Wire Services