AI Stocks Are Driving the S&P 500 — and Jefferies Says the Rally Has Legs
11 May 2026 · 09:51 UTC · CoinCentral RSS Feed · Original source
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Summary
AI stocks account for more than 80% of S&P 500 gains in 2026. Excluding AI stocks, the S&P 500 is up only 2% for the year. Investment bank Jefferies argues the rally is fundamentally supported by earnings growth rather than inflated valuations, positioning AI as "the cheapest sector to own" on a price-to-earnings-growth (PEG) basis. Forward earnings estimates for AI stocks have increased substantially, suggesting potential continuation of the rally.
Why it matters
The mechanism operates through investor risk sentiment transmission: strong equity performance on fundamental earnings growth indicates economic confidence and growth expectations. When equities rally on substance rather than speculation, investors typically increase allocation to other risk assets including crypto. Bitcoin eventually follows macro risk-appetite shifts but lags equity moves. Altcoins show tighter correlation with sentiment swings and faster response patterns. Key assumptions: (1) AI stock momentum persists as forward earnings materialize, (2) Fed policy remains neutral or accommodative, (3) no major geopolitical shocks disrupt risk appetite, (4) narrative sustainability on PEG valuation basis. Major uncertainties include: potential AI sector valuation concerns, Fed rate change implications, execution risk on earnings delivery, and possible rotations out of concentrated mega-cap AI positions. The article's truncated content limits assessment of supporting data depth; however, Jefferies attribution provides institutional credibility. Timeframe dynamics reflect typical market absorption: minute/hour timescales unlikely to show direct impact; daily effects emerge as sentiment filters through crypto markets; weekly/monthly periods show clearer correlation as institutional positioning adjusts and macro themes consolidate.
Expected impact
Strong AI stock performance representing over 80% of S&P 500 gains signals sustained risk-on market sentiment and robust investor appetite for growth assets. This macro backdrop typically correlates positively with cryptocurrency inflows as investors reallocate to high-growth, risk-bearing assets. Jefferies' assessment that the rally is earnings-driven rather than speculative supports confidence in continued momentum. Bitcoin would benefit from this positive macro sentiment, though with moderate sensitivity given its partial macro-independence. Altcoins, being more sentiment-driven and tightly correlated with broader risk appetite, would experience stronger upside potential in this environment. However, concentration risk in AI stocks creates tail-risk concerns; a significant equities correction could trigger broader deleveraging affecting crypto markets. The "cheapest sector to own" narrative suggests further upside potential for equities, reinforcing the risk-on backdrop. Market impact strengthens over longer timeframes as positioning adjusts and macro themes consolidate.