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TGIF, everyone. It's Friday, May 29th, 2026. This week's topic, blast off. But before we start, here's a word from our attorneys.

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The information and opinions presented in this podcast, including the views of guests not affiliated with the Blue Spring Wealth, are for general informational and educational purposes only and should not be considered an investment in tax or legal advice. Any references to specific securities or sectors, industries, products, or services, do not constitute a recommendation or endorsement. All investments involve risk, including the possible loss of principles.

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Up, up and away has certainly been the theme for stocks all spring. Actually, blast off is more like it. Nothing has stalled this mighty ascent. Tech stocks continue to lead the charge higher. The stock market hasn't cared about rising interest rates, high gas prices, nagging inflation, nor a war in the Middle East. It just has not cared. It's also caught so many by surprise. Tech has been on a tear. The SP 500 technology sector gained nearly 20% in April. Its super strength continued in May. The last time the tech sector recorded back-to-back double digit monthly gains was in March and April of 2009. That was when the bear market from the financial crisis bottomed. Before that, it had only happened four other times. Ever. Keep in mind, ever is a long time. For more perspective, this was the best two-month run for tech since 2002, which was the bottom after the dot com bubble burst. Importantly, those events came at major market lows, giving birth to new bulls. The difference with today, it's happening at all-time highs. This bull run has been beyond impressive. Explosive earnings growth on the back of the massive AI spend is what has sent stocks skyward. Remember, more than anything else, it's earnings that drive stock prices. SP companies grew earnings by 28% in Q1, nearly doubling the expectations. The Mag 7 reported a blended 63% increase in earnings compared to a year ago. It's been incredible growth, but the growth has been experienced across the board. The other 493 companies recorded 17% growth last quarter, far surpassing street estimates. Leadership has been quite concentrated, reflecting the AI trade. Not all stocks have been participating. Tech in general has been super strong. Semiconductors have gone parabolic. Despite the fresh record highs heading into Friday, there were only 18 stocks in the SP 500 sitting at 52 week highs. What's more, there were ten that were at lows on the year. They are much smaller in size, which has less impact on the stock market. It's the AI trade that's dominating everything. The concentration is palpable. Just four companies, Alphabet, Amazon, NVIDIA, and Meta, accounted for 71% of the Q1 earnings growth. It supercharged the spring rally. However, seven of the eleven SP sectors were actually down in the month of May. Tech has definitely been carrying the load. There are some new signs of rotation, though. Other sectors like transportation, healthcare, and aerospace and defense caught a bid this week. Lower oil prices with continued expectations for an extended ceasefire are helping there. Geopolitics tend to be ignored by the market until they're not. It's never clear when that is. But the market sure seems to be pricing in a more favorable outcome than it had prior. We anticipate the conflict with Iran to still be an issue throughout the rest of the year. Stating the obvious, 2026 has already been hyper eventful. It's still not quite half done either. This will prove to be a year for IPOs too. After a fairly dormant stretch, things are about to get really active. Three large yet private companies stand out. Long rumored to go public, it appears that now is the time. SpaceX is slated to make its stock market debut on the NASDAQ on june twelfth. It is expected to be valued at nearly two trillion dollars. That would shatter all previous records. Another anthropic just passed OpenAI with a one trillion dollar valuation. Both pure play AI startups plan to IPO later this year. The AI race is heating up even more, if you can believe it. Part of the issue is so many fast growing innovative tech companies have stayed private far longer than historically. Increased regulations following the financial crisis made it more onerous for public companies. Many companies didn't want to deal with the heightened scrutiny. It's particularly the case with such cutting edge organizations. Venture capitalists and early institutional investors have maintained their large ownership for years. Large amounts of money have fueled their rises and inflated their values. These investors will be finally cashing in on massive gains when they sell their stock to the new, largely retail buyers. That gives you immediate pause. It's exit liquidity for those early investors. Initial public offerings used to be the birthing grounds for tech. Now it's more like teenagers or even middle-aged, where the fastest growth days could be over. These innovative companies are going public at very high prices. But make no mistake, they're still growing. This AI revolution is like nothing anyone has ever seen. There is so much hype around these IPOs. Investors have been excited about the prospects for SpaceX for the better part of two decades. The company was founded by Elon Musk in 2002. SpaceX is estimated to come public with close to a $2 trillion valuation. That crushes anything prior. More on that in a minute. Most importantly, there's this. Deal terms matter. Elon Musk and other insiders own the B shares, which allow ten votes per share owned. Individual investors will be buying the A shares in the IPO, which carry one vote. Musk's retained voting power will be 85%. There's no other publicly traded company that has anything close for an individual owner. It's a key component of the Elon Empire. What's more, the price talk has SpaceX valued at roughly 100 times its revenue. The company is also far from profitable. For perspective, Amazon trades at three times sales, Alphabet trades at six times sales, NVIDIA trades at twenty times sales, and they're all three extremely profitable. So there's that. In case you're wondering, NVIDIA went public in 1999 at a valuation of $340 million. Amazon IPO't two years prior, valuing the company at $438 million. Apple was a standout going public in 1980, worth over $1 billion. It was the largest IPO since the Ford Motor Company came public in 1956. Now that's some history. Facebook holds the record today. Now called Meta, the company IPO'd in 2012 at $81 billion. For those of you that remember, the Facebook IPO was not considered a success. It took 14 months to regain its IPO price, having fallen over 50% in the interim. We must never forget, IPOs are not for everyone. The idea for the next big thing to support the AI race is to send it to space. It's being called orbital AI. Both Elon Musk and Jeff Bezos, amongst many other Silicon Valley leaders, believe building out data centers in outer space will solve many issues. First and foremost, there is a limitless energy source from the sun. Satellites have run on solar power for decades, but these data centers would require a whole lot more energy. The data centers require vast amounts of cooling. Check, space is really cold. Regulating could be challenging though. If doable, data centers in space would also bypass the growing protests of massive data center build-s on Earth. The International Space Station generates enough electricity to power roughly 100 advanced AI chips. An orbital data center would likely need to produce electricity to power thousands of chips inside thousands of satellites. Elon Musk thinks SpaceX has the solutions. There's a large squad of believers. Major investments are being made. This is where the major confluence of big ideas and the ability to execute meets a mountain of hype. And investors ride the wild rapids while trying to avoid the rocks. Okay, I'm mixing metaphors now. But you get the point. Back to the market. Just like rockets, stocks don't go skyward forever. They require rest, refueling, and reassessment. Corrections do just that. It's never obvious when it happens, but it's always an inevitability. Perhaps the SpaceX IPO marks another near term top. There are many elements of bubble like conditions in place, but bubbles rarely pop when there's a bubble in calling bubbles. They tend to inflate more. This springtime rally has been just remarkable in the face of so many pressures. The market has been looking past the on-again, off again rhetoric around Iran for weeks and pricing in some sort of ceasefire and resolution. The December contract for oil is $77, a far cry from the $100 plus dollar hit early in the conflict. No matter, we are used to uncertainties. We've been at this a while. We are long term investors equipped to deal with short term issues. We are prepared for whatever comes our way. That's long been the Biddell Fraser way. Have a nice weekend. We'll be back dark and early on Monday. I'm Mike Frazier.