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• NVIDIA (NVDA.us) remains at the centre of the AI infrastructure boom, with strong fundamentals and improving technical momentum keeping investor attention on the recent pullback.
• Microsoft (MSFT.us) combines improving technical momentum with a compelling AI-driven growth story, as its cloud leadership, expanding AI ecosystem, and strong financial performance strengthen its long-term investment appeal.
• SoftBank's (9984.jp) strong technical momentum and bold AI-focused investment strategy position it as a compelling opportunity to gain exposure to the long-term growth of artificial intelligence, supported by its stakes in OpenAI, Arm, and expanding AI infrastructure ambitions.

Quick Market Overview

US stocks continued their record-setting run as familiar themes of strong earnings, artificial intelligence optimism, and a resilient economy kept investor confidence elevated. The SPX500 and NAS100 reached new highs, helped by strength in technology and software shares. While geopolitical risks from the Iran conflict and higher oil prices remain concerns, markets have so far focused on improving corporate profits and steady economic growth. The key question is whether earnings momentum and AI enthusiasm can continue to outweigh inflation pressures and global uncertainty.

General Equity Market Health (SPX500)

The SPX500 has been on an exceptional run in 2026. Year to date, the index is up around 10%, with momentum accelerating sharply since its April low near 6,300. The reason behind the continued climb is straightforward: companies are still delivering stronger profits, particularly those benefiting from the artificial intelligence boom. This rally is not being driven purely by excitement, but by genuine earnings growth, as AI infrastructure investment drives demand for chips, servers, memory, networking equipment, and data centres. Companies such as Nvidia, Microny, and Dell have benefited as the AI investment cycle translates into stronger revenues and improved outlooks. However, the rally's greatest strength is also its biggest risk. Investors are assuming that elevated AI spending can continue, meaning any slowdown in investment or failure of earnings to justify expectations could quickly turn today's optimism into a source of market volatility.

Potential Trade Setups

Artificial intelligence has become one of the defining investment themes in global markets, with NVIDIA, Microsoft, and SoftBank each offering exposure to different parts of the AI ecosystem. NVIDIA sits at the centre of the AI infrastructure buildout through its leadership in accelerated computing, Microsoft is integrating AI across its cloud, software, and enterprise platforms, while SoftBank provides broader exposure through strategic investments in companies such as OpenAI and Arm Holdings, alongside expanding AI infrastructure ambitions.

NVIDIA (NVDA.us)

Technical Analysis
- NVDA is up around 18% year-to-date.
- The stock pulled back around 11% from its May high.
- However, this could represent a "buy the dip" opportunity within the broader uptrend.
- Since pulling back, NVDA has broken above a downsloping trendline, with its RSI showing a similar breakout.
- The RSI has now moved back above 50 (blue arrow), while its EMAs are approaching a potential bullish crossover.
- As long as the RSI remains above 50, momentum should remain supportive for the share price.
- If the EMAs begin to develop positive angle and separation to the upside, this would strengthen the bullish technical setup.

Caveat
- If the RSI reverses and moves back below 50, this would be a negative technical development.
- If the RSI remains below 50, the recent bullish signal would weaken significantly.

Fundamental Perspective
Nvidia's investment case remains centred on its position as a critical enabler of the artificial intelligence infrastructure buildout. Its latest results highlighted that AI demand continues to translate into exceptional financial performance, with revenue reaching a record $81.6 billion and data centre revenue climbing to $75.2 billion as customers accelerate investment in AI computing.

The company's Blackwell platform remains a key growth driver, supported by demand from cloud providers, enterprises, and the broader shift toward accelerated computing. While competition, export restrictions, and elevated expectations remain important risks, Nvidia's combination of market leadership, advanced hardware, networking capabilities, and a deeply embedded software ecosystem leaves it well positioned as one of the major beneficiaries of long-term AI adoption.

Microsoft (MSFT.us)

Technical Analysis
- MSFT has had a weaker year-to-date performance, down around 5%.
- Nevertheless, it remains a compelling potential opportunity.
- From a technical perspective, MSFT has completed a head and shoulders bottom, which is typically viewed as a bullish reversal pattern.
- The share price has broken above the pattern's neckline, suggesting confirmation of the breakout.
- The measured move from the pattern suggests a potential target around 535, representing upside of more than 16%.
- Measured moves are theoretical and may not always be reached, but they do highlight the potential bullish implications of the pattern.
- The key indicator to monitor is the RSI. As long as it remains above 50, underlying momentum should remain supportive for the share price.

Caveat
- If the share price falls back below the neckline, this would be a negative technical development.
- If the RSI moves below 50 and remains there, momentum would weaken and the bullish pattern could potentially be invalidated.

Fundamental Perspective
Microsoft's investment case is built around its position as one of the best-placed companies to benefit from the AI transformation, combining a leading cloud platform with a deeply embedded enterprise software ecosystem. Its latest results showed that demand remains strong, with revenue increasing 18% to $82.9 billion, Microsoft Cloud revenue rising 29% to $54.5 billion, and Azure and other cloud services growing 40% as AI adoption continues to drive cloud consumption.

Beyond infrastructure, Microsoft is integrating AI across its ecosystem through products such as Copilot, Microsoft 365, GitHub, and Azure AI, creating opportunities to strengthen customer relationships and unlock new revenue streams.

While significant AI investment costs, competition, and uncertainty around the speed of AI monetisation remain risks, Microsoft's scale, recurring revenue base, and ability to embed AI into everyday business workflows leave it well positioned for long-term growth.

Softbank Group Corp. (9984.jp)

Technical Analysis
- SoftBank has recently become Japan's most valuable company, overtaking Toyota.
- The stock is up around 90% year-to-date.
- Its EMAs remain in a bullish formation, showing positive angle and separation.
- The RSI has remained above 50, suggesting that underlying momentum remains positive and supportive for the share price.
- After a strong rally over the past two months, there is a risk of short-term profit taking or a pullback.
- In this scenario, the 6,425 level represents a logical support area to monitor.
- Pullbacks could provide potential "buy-the-dip" opportunities within the broader uptrend.

Caveat
- If the share price breaks below 6,425, this would be a negative technical development.
- If the RSI moves below 50 and remains there, momentum would weaken and the bullish technical case would be significantly reduced.

Fundamental Perspective
SoftBank's investment case is centred on its transformation into one of the world's most ambitious investment platforms focused on the artificial intelligence opportunity. Its latest results highlighted the potential upside of this strategy, with record annual profitability driven largely by investment valuation gains, particularly from its exposure to OpenAI, alongside its majority ownership of Arm Holdings, whose chip architecture plays an important role across the broader computing ecosystem.

Since earnings, SoftBank has continued to expand its AI ambitions, including an initial €45 billion commitment to develop large-scale AI data centre infrastructure in France, as part of a broader plan that could reach €75 billion, further increasing its exposure to AI infrastructure.

While the strategy carries significant risks, including valuation volatility, high capital requirements, and dependence on successful execution, SoftBank provides investors with broad exposure to some of the most significant long-term themes shaping the future of technology.

Hot News, Cold Logic

While artificial intelligence represents one of the most exciting long-term growth opportunities in global markets, investors should recognise that the theme is not without risk. AI-related companies have benefited from significant optimism, meaning valuations often reflect high expectations for future growth. Increasing competition, substantial infrastructure investment requirements, and uncertainty around how quickly AI adoption converts into sustainable profits remain important considerations. While NVIDIA, Microsoft, and SoftBank each provide unique exposure to the AI opportunity, their long-term success will depend on continued execution and whether the technology can deliver on the transformational potential currently expected by investors.

Final Thought

Markets continue to climb a wall of worry, with AI optimism and resilient earnings powering risk appetite while easing oil prices offer some relief from recent inflation fears. Yet with valuations elevated, geopolitics unresolved and expectations increasingly demanding, the next phase of this bull market will depend less on the promise of AI and more on whether companies can deliver the growth investors are already pricing in.