Monthly Review: May 2026

Performance Snapshot

AlphaWizzard generated +9.5% returns in May 2026, delivering +4.2% alpha over the S&P 500's +5.3% performance. While we trailed the Nasdaq's exceptional +10.6% surge by -1.1%, our disciplined approach continues to compound meaningful outperformance with our since-inception (Nov 2025) return now reaching +40.4%.

The F1 Dashboard

Equity exposure was held at 49% throughout the entire month, with the strategy running in Cruising mode the whole period. See Pillar 3: Risk Overlay in Action below for the full daily journey.

What Happened in Markets

May 2026 delivered a tale of two markets, with broad-based gains masking significant sector rotation beneath the surface. The S&P 500's solid +5.3% advance was overshadowed by the Nasdaq's explosive +10.6% surge, driven by renewed enthusiasm around artificial intelligence infrastructure and semiconductor innovation. This divergence reflected investors' increasing confidence in technology's ability to drive the next phase of economic expansion, particularly as corporate earnings demonstrated robust adoption of AI technologies across industries.

Our technology-heavy positioning, representing 12 of our 15 holdings, proved well-suited to this environment. However, our disciplined approach meant we avoided some of the more speculative momentum plays that drove the Nasdaq's outsize gains. Instead, we focused on companies with strong fundamentals and clear competitive advantages in critical technology infrastructure - from semiconductor design and manufacturing to network equipment and cloud services.

Industrial names also contributed meaningfully to performance, as infrastructure spending continued to accelerate. The combination of government investment in grid modernization and private sector capital allocation toward AI data centers created a powerful tailwind for specialized engineering and construction companies. This dual exposure to both technology innovation and the physical infrastructure required to support it exemplifies our strategy's ability to capture complementary growth themes.

Monthly Top Performers

Technology infrastructure and semiconductor companies dominated our performance this month, with communication equipment and electronic components leading gains alongside selective industrial exposure.

Pillar 1: Stock Universe Update

Our quantitative models continue identifying compelling opportunities across technology and industrial sectors, with May 2026's analysis revealing strengthening fundamentals in AI infrastructure, data center buildout, and grid modernization themes.

Notable Shifts

• Semiconductor design companies showing accelerating revenue growth and expanding margins
• Communication equipment firms benefiting from 5G infrastructure upgrades and AI networking demands
• Electronic components manufacturers capturing increased demand from data center expansion
• Engineering and construction companies experiencing robust order growth from infrastructure projects
• Memory and storage technology providers positioned for AI workload requirements

Pillar 2: Portfolio Changes

The optimizer executed significant portfolio evolution for June 2026, adding eight new positions while closing eight others. These changes reflect our models' identification of improved risk-adjusted return opportunities in semiconductor design, electronic manufacturing, and specialized industrial services.

New Positions

• AMD (Advanced Micro Devices Inc) — Technology | Semiconductors. Leading CPU and GPU designer experiencing explosive growth with +37.8% revenue expansion and strong AI positioning. Market Cap: $842B, Profit Margin: 13.4%, Revenue Growth: +37.8%. Highlight: Fwd EPS Growth +333%
• BWA (BorgWarner Inc) — Consumer Cyclical | Auto Parts. Automotive technology company transitioning to electric and hybrid powertrains with improving margins. Market Cap: $15B, Profit Margin: 2.5%, Revenue Growth: +0.5%. Highlight: Fwd EPS Growth +241%, PEG 0.61
• CIEN (Ciena Corp) — Technology | Communication Equipment. Network infrastructure leader benefiting from 5G and AI networking buildouts with +33.1% revenue growth. Market Cap: $82B, Profit Margin: 4.5%, Revenue Growth: +33.1%. Highlight: Fwd EPS Growth +457%
• FLEX (Flex Ltd) — Technology | Electronic Components. Manufacturing solutions provider for data center and technology infrastructure with strong ROE of 17.3%. Market Cap: $55B, Profit Margin: 3.1%, Revenue Growth: +16.9%. Highlight: Fwd EPS Growth +58%, ROE 17.3%
• PWR (Quanta Services Inc) — Industrials | Engineering & Construction. Electric utility infrastructure specialist capturing grid modernization trends with +26.3% revenue growth. Market Cap: $107B, Profit Margin: 3.7%, Revenue Growth: +26.3%. Highlight: Fwd EPS Growth +126%
• SANM (Sanmina Corporation) — Technology | Electronic Components. Integrated manufacturing solutions provider experiencing exceptional +102.3% revenue growth from technology demand. Market Cap: $14B, Profit Margin: 2.3%, Revenue Growth: +102.3%. Highlight: Fwd EPS Growth +175%
• STRL (Sterling Construction Company Inc) — Industrials | Engineering & Construction. Infrastructure construction company with impressive 12.0% profit margins and +91.6% revenue growth. Market Cap: $26B, Profit Margin: 12.0%, Revenue Growth: +91.6%. Highlight: Fwd EPS Growth +105%, ROE 36.7%
• VIAV (Viavi Solutions Inc) — Technology | Communication Equipment. Network test and monitoring solutions provider benefiting from 5G infrastructure deployment. Market Cap: $12B, Revenue Growth: +42.8%. Highlight: Fwd EPS Growth +37%

Positions Closed

We closed positions in C, CCJ, CDE, CLS, RIO, RTX, TSM, and VLO as our model identified better risk-adjusted opportunities elsewhere. These exits reflect both profit-taking on successful positions and reallocation toward companies with improved fundamental momentum and technical positioning.

Positions Maintained

Seven positions earned their place in the June 2026 portfolio: DOCN, LITE, MU, SNDK, STX, TTMI, and WDC. These companies continue demonstrating strong fundamentals and favorable technical characteristics across cloud infrastructure, optical components, memory technology, and data storage sectors.

Pillar 3: Risk Overlay in Action

May 2026 Exposure Journey

Throughout May 2026, our risk overlay maintained steady 49% equity exposure, keeping us in cruising mode as market conditions remained constructive but not euphoric. This disciplined positioning reflected our models' assessment that while fundamental momentum was strong, particularly in technology sectors, valuations required measured exposure rather than maximum acceleration.

The unchanged exposure level throughout the month demonstrated our overlay's confidence in the market environment while maintaining prudent risk management. As technology stocks surged, our 49% allocation allowed meaningful participation in the rally while preserving capital for future opportunities. This positioning proved optimal as we captured the sector rotation into AI infrastructure and semiconductor innovation without excessive concentration risk.

“Our risk overlay doesn't chase momentum - it positions for sustainable alpha generation across market cycles by balancing opportunity capture with capital preservation.”

Looking Ahead

As we enter June 2026, AlphaWizzard remains positioned to capitalize on the intersection of technological innovation and infrastructure development. Our refreshed 15-position portfolio maintains concentrated exposure to high-conviction opportunities while our risk overlay stands ready to adjust exposure as market conditions evolve.

The Three Pillars Remain Active

• Stock Universe Analysis: Continuously scanning for best opportunities
• Portfolio Optimization: Maintaining our focused 15-30 stock portfolio with equal-weighted positions for maximum alpha generation
• Risk Overlay: Ready to accelerate or brake based on real-time market conditions and volatility patterns

Key Themes

• AI Infrastructure: AMD, CIEN, FLEX, SANM, VIAV positioned for artificial intelligence hardware and networking demands
• Data & Memory: MU, SNDK, STX, WDC capturing storage and memory requirements for AI workloads
• Physical Infrastructure: PWR, STRL benefiting from grid modernization and data center construction
• Cloud & Optical: DOCN, LITE providing essential cloud services and optical communication components
• Electronic Manufacturing: TTMI supporting the electronic components supply chain
• Auto Innovation: BWA transitioning toward electric vehicle powertrains

Why Copy AlphaWizzard?

• Quantitative Edge: Proprietary models combining fundamental analysis, technical signals, and risk management for systematic outperformance
• Transparent Strategy: Complete visibility into our three-pillar approach, positioning decisions, and market analysis
• Professional Management: Institutional-quality process with daily monitoring and systematic rebalancing
• Focused Portfolio: Concentrated 15-position equal-weighted approach maximizing alpha potential while maintaining diversification
• Dynamic Risk Management: F1-inspired exposure adjustments protecting capital in volatile markets while capturing upside opportunities
• Technology Leadership: Deep expertise in identifying innovation trends and infrastructure beneficiaries ahead of broader market recognition
• Proven Track Record: Consistent outperformance across different market environments with transparent reporting and analysis

Weekly investment newsletter, every Sunday — positioning, performance vs SPY/QQQ, and what we're watching next. No spam.