Friday was a tough sailing day, but it could have been worse. In fact, I’m impressed because profit-takers in hardware are plowing funds back into software (IGV). Case in point, Bill Ackman dumped Google (GOOG/L), which is arguably the best-positioned artificial intelligence (AI) name to buy Microsoft (MSFT).

The Other Side of the Trade

I should note that while Ackman is making a big bet on MSFT, other deep-pocketed investors and funds are running for the exits:

• TCI Fund Management sold $8.0 billion worth of MSFT, reducing its stake in the fund to 1% from 10%.
• Dan Loeb is completely out of MSFT.
• And the Bill Gates Foundation just dumped 7.7 million shares, his last remaining tranche of stock, for $3.2 billion.

We got a look at Greg Abel’s first trades as successor to Warren Buffett:

Bought: Macy’s (M), Delta (DAL), and Alphabet (GOOGL)

Notable Sells: Visa (V), Mastercard (MA), and UnitedHealth Group (UNH)

New Leadership

Last Friday’s session was led by software and crude oil names, along with other stocks that have been slammed on the assumption that AI would severely erode their moats or render them irrelevant.

There are many potential software names to choose from, including those that posted strong results last week (Monday.com Ltd (MNDY) and Figma Inc (FIG)).

FactSet Research Systems (FDS) and Moody’s Corp (MCO) are also very compelling.

Factors

The problem for the broad market is that all the other factors beyond growth and momentum would need to pull in unison to keep the broad market positive during a pullback in the hottest stocks. Meanwhile, the big January move in small and midcaps continues to fade.

Right now, it's ‘Technology (XLK) or bust,’ which could trigger higher volatility.

This week is all about Nvidia (NVDA), which reports after the closing bell on Wednesday.

Today’s Session

Headlines about higher yields and rising commodity prices have cast doubt on the economy, but economic data have been overwhelmingly better than expected.  That adds a wrinkle to the notion that the stock market is out of touch, especially the AI trade, and due to “catch down” to the rest of the market.

After meandering most of the morning, the market has turned higher ahead of the opening bell, led by the usual suspects.

There will be no catching down at the open.

Comments

Goid Morning Charles, I was a participant in the “State of the Market” Zoom call this past Saturday. During the meeting, you mentioned that you’ve been considering extending your show Making Money to two hours. The show has become a valued part of my daily routine, and I know that’s true for many others in our investment group. Its current length is ideal — delivering direct, insightful, and fluff-free commentary that helps investors and traders stay sharp without becoming overwhelming. While I understand the appeal of more airtime, I worry that doubling the length could cause some viewers to lose focus or tune out. That said, if you’re seriously considering additional coverage, you might explore splitting the content into two distinct shows — similar to Scott Wapner’s Fast Money Halftime Report and Closing Bell. Keeping the current Making Money format intact while adding an earlier show focused on “what’s happening and why in the markets today" could give viewers actionable insights at two different points during the trading day. Just wanted to share my perspective as a loyal viewer. Either way, I’ll continue tuning in. Gabe Prado on 5/18/2026 7:42:12 AM

Hi Charles - I heard about the your idea of getting more air time on State of the Market and my thought was if Varney can go for 3 hours, there's no problem with you doing 2 hours as long as it is well curated. Good luck. Mike Mayone on 5/18/2026 10:26:27 AM

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