U.S. stocks delivered a powerful rally in May, driven overwhelmingly by artificial intelligence-related companies, with technology stocks vastly outperforming every other sector and pushing the broader market to new record highs.
The S&P 500 gained 5.1% during the month, but the rally was highly concentrated. The Information Technology sector surged 15.9%, while eight of the index's eleven sectors actually finished May in negative territory.
Investors continued pouring money into companies tied to the AI infrastructure boom, including semiconductor manufacturers, server providers, cybersecurity firms, cloud software companies and data-center operators.
The technology sector has now risen 23.5% in 2026 and 23.3% in 2025, making it one of the strongest-performing areas of the market.
Semiconductor stocks remained among the biggest beneficiaries of the AI spending wave. The semiconductor-focused ETF SOXX jumped 23% in May alone and has gained nearly 89% so far in 2026 following a 40% rise in 2025.
However, the rally expanded well beyond chipmakers. The S&P 500 Software and Services Index surged 16.3% during May, marking a dramatic turnaround after entering the month down 15.7% for the year.
Dell Leads Historic Monthly Rally
Shares of Dell Technologies emerged as the top-performing stock in the S&P 500 during May, soaring 101.4%.
The rally accelerated after the company reported strong earnings and revealed that revenue from its AI-optimized server business had skyrocketed, reinforcing expectations that corporate spending on AI infrastructure remains robust.
Dell shares are now up 234% in 2026.
AI and Software Stocks Surge
Several technology companies recorded extraordinary gains during the month:
- Micron Technology climbed 87.8%.
- Datadog jumped 87.1%.
- Super Micro Computer surged 68.2%.
- CrowdStrike gained 64%.
- Fortinet rose 63.6%.
- NetApp advanced 57.3%.
- Palo Alto Networks added 57.1%.
- ServiceNow climbed 40.8%.
- Oracle gained 39.9%.
- Cisco Systems rose 31.6%.
Cybersecurity and cloud software stocks were particularly strong as investors increasingly viewed them as key beneficiaries of growing AI adoption across businesses.
Chipmakers Continue to Dominate
Semiconductor companies remained central to the AI investment story.
Shares of Advanced Micro Devices gained 45.6% during May, while Micron's near-88% rally reflected growing demand for memory chips used in AI servers and data centers.
The ongoing buildout of AI infrastructure has created enormous demand for processors, memory chips, networking equipment and storage solutions, benefiting companies across the semiconductor supply chain.
Broader Market Rally Remains Narrow
Despite the strength in technology stocks, many traditional sectors struggled.
Energy was the worst-performing sector in May, declining 6.1%, followed by Utilities, which fell 5.5%. Financials, Real Estate, Industrials and Consumer Staples also finished the month lower.
The divergence highlights how much of the market's gains continue to be driven by a relatively small group of technology and AI-related companies.
Even mega-cap technology leader Microsoft, one of the largest companies in the world, did not make the list of top monthly performers despite rising 10% during May.
AI Remains Wall Street's Dominant Theme
The latest market surge underscores investors' continued confidence that artificial intelligence will remain one of the most powerful growth drivers for corporate earnings in the coming years.
While concerns about valuations and a potential AI bubble persist, strong earnings results from companies such as Dell, Datadog and Micron have reinforced the view that the AI boom is generating real revenue and profit growth, helping fuel one of the strongest technology rallies seen in years.
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