U.S. Tech Reclaims Global Momentum with an 8.8% Surge
The Nasdaq 100 index outperformed global tech peers in May, surging 8.8%—its strongest monthly gain since November 2023. In contrast, Europe’s STOXX Europe 600 Technology Index climbed a modest 7.8%, signaling a shift in capital flows back toward U.S. tech giants.
This resurgence followed months of subdued performance and was largely attributed to:

Easing trade tensions, particularly between the U.S. and China

Accelerating AI-related investments, backed by sovereign wealth and corporate demand

Robust U.S. macroeconomic data, including job growth and consumer spending

A strong rebound in crypto-linked equities

The rally marked a sharp reversal in sentiment that had weighed heavily on mega-cap stocks earlier this year.
AI and Middle East Deals: Catalysts Behind the Boom
A central driver of this rebound was renewed optimism in AI, supercharged by strategic economic partnerships. Notably, Nvidia (NASDAQ:NVDA) soared 24.1% during the month, bolstered by:

A high-profile AI alliance with Saudi Arabia

First-quarter earnings that exceeded Wall Street expectations

For real-time visibility into corporate financial performance, including revenue surprises and earnings beats like Nvidia’s, the Earnings Historical API provides analysts with granular data on company-specific results across quarters.
Alphabet Inc. (NASDAQ:GOOGL) also contributed to the index’s strength, gaining over 8% amid increasing demand for its generative AI offerings in enterprise search and cloud infrastructure.
Tesla (NASDAQ:TSLA), while gaining just 0.4% in May, had already rallied over 46% since April—spurred by Elon Musk’s reaffirmed leadership focus and plans for AI-powered robotaxis, expected to launch in June.
The Magnificent 7 Shine Again
According to Deutsche Bank, “The Magnificent 7 rose +13.4%, the best month since May 2023.” This includes key players like Apple, Microsoft, Nvidia, Meta, Amazon, Tesla, and Alphabet—all of which benefited from both sector rotation and elevated investor appetite for AI infrastructure.
This rally reversed prior underperformance and hints at renewed concentration risk, as capital again clusters around a narrow group of mega-cap leaders.
Sector-Wide Strength, but Caution Ahead
Every sub-sector within tech posted gains in May:

Hardware led with an 11% rise, driven by chip stocks and AI servers

IT services remained the weakest performer year-to-date, though it rebounded modestly

To dive deeper into how different tech sub-industries are priced, the Industry P/E Ratio API offers a snapshot of current and historical valuation metrics, providing context to sector moves and potential overextensions.
Trade Policy Risks Loom
Despite May’s gains, Deutsche Bank flagged macro risks that could cap future upside:

Tariffs re-emerged after a U.S. court temporarily paused new restrictions, only for another ruling to reinstate them

Export controls on semiconductors remain in place, tightening supply chains and stalling certain cross-border deals

The U.S.–China détente, while promising, is still fragile

Policy uncertainty and persistent geopolitical risk leave U.S. tech exposed to abrupt sentiment shifts, particularly in hardware and advanced chip sectors.
Conclusion: Momentum or Mirage?
May was a breakout month for U.S. tech, with AI enthusiasm and macro resilience aligning to fuel outsized gains. But whether this marks a sustainable inflection point or a short-term bounce will depend heavily on:

How deeply AI capital expenditures scale

The outcome of pending tariff disputes

Stability in global supply chains

For investors and analysts, staying nimble—and data-driven—is key.