Palantir Technologies Inc. (PLTR) was the latest Big Tech stock that easily beat both top- and bottom-line expectations with its first-quarter results posted on Tuesday. Revenue grew nearly 85% on a year-on-year basis. Despite this, the stock dropped 7% yesterday as technology is getting priced for perfection. The shares of Intel (INTC) , meanwhile, doubled in April, the stock’s best monthly performance in over half a century.
Projected capital expenditure for AI infrastructure continues to move higher. Most of this is due to cost pressures. Average prices for NAND and DRAM memory have exploded in 2026. The continued effective closure of the Strait of Hormuz has locked in a big chunk of global helium supplies. Helium is critical component of semiconductor manufacturing. The backlog for large power transformers has increased to 24 months or longer in most major markets. Lead times ran seven to 14 months prior to the pandemic. For some specialized units, procurement timelines have moved out to three to four years. That is a big tailwind for names like GE Vernova Inc. (GEV) , but not for companies building out huge AI data centers.
And all these costs and increased capital expenditure budgets are going to lead to a massive increase in depreciation expenditures at the hyperscalers in the coming years as Doug Kass pointed out on his Daily Diary Tuesday.
And outside of the surge of spending on the AI buildout, it is hard to find many positives right now across the economy. The housing sector is struggling, and with the yield on the 30-Year Treasury broaching 5% this week for the first time since last May, little relief is in the offing on the mortgage rate front. New home inventory is at its highest level since the Housing Bust, outside a burst up in late 2022 as mortgage rates rose sharply. Total new home sales did come in higher than expected in March. But that was largely because median new home prices fell from $407,000 in March of 2025 to just over $387,000. The lowest median new home price since July 2021.
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Residential real estate construction spending in the first quarter was off 8% year-over-year and subtracted just over .3% from gross domestic product growth in the first quarter of this year. Home foreclosures also jumped 26% in Q1. Due to changes in mitigation programs around FHA programs in late September, I expect foreclosure rates to continue to accelerate throughout 2026.
Sharp increases in fuel costs are a negative for consumer sentiment, which already is in the tank. Job growth in 2025 averaged 15,000 a month and layoffs surged by over 50%. In recent weeks, Oracle (ORCL) , Meta Platforms (META) , HSBC plc. (HSBC) , USPS , Block (XYZ) and other major companies have announced major reductions in force in recent weeks. A lot of these restructurings have named AI as the main culprit but are partly due to the over hiring following the pandemic or freeing up capital for building out AI infrastructure. That said, there are growing fears that AI could significantly disrupt the jobs markets.
Hopefully peace is nearly on hand and by the end of May, traffic through the Strait of Hormuz starts to flow again. The Devil, as always, being in the details of the latest proposal. Even if this latest conflict in the Middle East winds down, however, the market and economy have a litany of other significant issues to deal with.
At the time of publication, Jensen had no position in any security mentioned.