In the space of just 48 hours, three genuinely historic events landed on global markets. On Wednesday 20 May 2026, Nvidia reported the most consequential earnings print of the year, and on the very same day, SpaceX filed the prospectus for what will be the largest IPO in the history of the United States, targeting a $1.75 to $2 trillion valuation. Less than 24 hours later, the Trump administration confirmed a $2 billion industrial-policy bet on quantum computing, taking direct federal equity stakes in nine companies.
This is not three separate stories. It is one story-about a market that is no longer worrying about whether the AI cycle is real, and is now openly pricing what comes after it. Our view is that this 48-hour window has materially validated the constructive stance we have held throughout this cycle, while also introducing one new structural risk our clients need to understand.
In this article, our team breaks down what Nvidia reported, what the SpaceX IPO means for index investors, what the new federal quantum programme says about the next compute paradigm, and the risk factors we are watching closely.
If you missed our previous piece on what was driving the spring pullback and why we remained bullish, you can read it here: Why Are Markets Falling? Is the AI Rally Over, or Is This a Buying Opportunity?
What Did Nvidia Just Report-and Why Does It Matter?
This was not a routine beat. This was a generational print.
- Revenue of $81.6 billion — up 85% year over year, ahead of the $78.8 billion consensus
- Data Centre revenue of $75.2 billion — up 92% year over year, now larger than the entire annual revenue base of most semiconductor peers
- Non-GAAP EPS of $1.87 — ahead of the $1.77 consensus
- Q2 FY27 guidance of $91.0 billion at the midpoint — another double-digit sequential step-up
- An additional $80 billion share buyback and a 25x increase in the quarterly dividend
- $50.3 billion in net cash from operations in a single quarter — nearly double the prior year
Perhaps more important than the numbers was the tone from the earnings call. CEO Jensen Huang closed with what may be the most quoted line of this earnings season: “This was an extraordinary quarter. Demand has gone parabolic. The reason is simple: Agentic AI has arrived.” Huang confirmed that Nvidia is now “the only platform that runs every frontier AI model”-and that hyperscaler capex from Microsoft, Google, Meta, and Amazon is still translating into actual shipments rather than press releases.
“What we just saw from Nvidia is the clearest possible confirmation that the AI capital expenditure cycle is real, sustained, and broadening. For our clients-especially the global expatriates we have built portfolios with over the last two decades-this is not a moment to panic about valuations. It is a moment to recognise that the earnings power underpinning the index is genuinely growing. That is what we are positioned for.”
— Michele Carby, Managing Partner – Wealth Management
Why Did the Market Power Through Nvidia’s Earnings Wobble?
There is an important nuance investors need to understand. Nvidia shares themselves drifted lower in the sessions following the print-the “buy the rumour, sell the news” reflex kicked in after the stock had rallied roughly 14% into the report. Nvidia has now closed lower on four of its last five earnings prints despite beating every quarter.
But the broader market did not flinch. The S&P 500 extended its weekly advance, and the Dow Jones Industrial Average closed at all-time highs. In our view, this divergence-soft Nvidia, strong index-is one of the most important signals of the entire cycle.
Here is why.
1. Is the Earnings Story Broadening Beyond AI?
Yes — materially. Of the 440 S&P 500 companies that had reported Q1 2026 results going into Nvidia week, 83% beat earnings estimates. S&P 500 annual earnings growth projections have been revised up to 28.6% from 14.4% in April. This is no longer a story of seven stocks doing all the work. The breadth has improved considerably, even as the AI complex continues to lead.
2. Is the Iran Oil Overhang Easing?
In our last article, we flagged elevated oil prices and the Iran conflict as one of the three pressure points behind the spring pullback. That pressure point is now actively unwinding. Hopes for a diplomatic resolution have lifted stocks as oil dropped on speculation that a deal would revive energy flows through the Strait of Hormuz. With US crude back around $96, well below its spring spike-the inflation pass-through risk haunting the bond market has materially cooled.
3. Is AI Capex a Multi-Year Cycle or a Short-Term Trade?
In our view, and this is the point the headline writers continue to miss-it is a multi-year cycle with a backstop. According to Gabelli Funds’ John Belton, Nvidia is now seeing a trillion-dollar order book through 2027. A trillion-dollar visible order book is not a bubble metric. It is a structural anchor.
“The question we keep getting from clients is whether this looks like 1999 all over again. The honest answer is no, and Nvidia’s print is exactly why. In 1999, the leaders of the rally were burning cash and trading on eyeballs. In 2026, the leader of the rally generated more than $50 billion of operating cash flow in a single quarter and is returning $80 billion to shareholders through buybacks. That is the inverse of a bubble.”
— Payal Trehan, Partner & Senior Investment Strategist
SpaceX: What Does the Largest IPO in US History Mean for Your Portfolio?
Lost in the noise around Nvidia’s print was a filing that may ultimately matter more to index investors. On the very same day, Wednesday 20 May 2026-SpaceX formally filed its prospectus with the SEC, confirming plans to list on the Nasdaq under the ticker SPCX. At a reported valuation of $1.75 to $2 trillion and a projected raise of $40 to $80 billion, this will comfortably eclipse the $29 billion Saudi Aramco record as the largest IPO in the history of US capital markets. Underwritten by Morgan Stanley and Goldman Sachs, the listing is targeted for as early as 12 June 2026.
The numbers are unprecedented. SpaceX reported $18.67 billion in 2025 revenue, up roughly 35 to 40% year over year, with Starlink subscribers crossing 10 million. Forward 2026 revenue is modelled at $22 to $30 billion. At the targeted valuation, that implies a price-to-sales multiple of roughly 58 to 65 times forward revenue.
Why Does the SpaceX IPO Matter for Index Investors?
For investors holding S&P 500 or Nasdaq tracker funds, which includes the majority of our clients-the most important feature of this IPO is not the valuation. It is what happens after listing day.
The S&P 500 and Nasdaq are actively considering rule changes to fast-track SpaceX into the major indices. According to JPMorgan estimates, if SpaceX is admitted to the S&P 500 at its targeted valuation, passive index funds would need to sell approximately $950 billion of their existing holdings to make room for SpaceX’s index weight. That selling pressure would fall disproportionately on the eight largest holdings: Nvidia, Apple, Microsoft, Amazon, Alphabet, Broadcom, Meta, and Tesla-the very names that have led the rally.
This is a structural dynamic that has not existed in modern markets at this scale. Tesla has already fallen approximately 3% on the announcement, reflecting early concerns about capital rotation. Wall Street analysts expect the rotation to take roughly three months to fully play out.
“The SpaceX IPO is the most important market-structure event of this cycle, and it is not getting the attention it deserves. Most of our clients hold core equity exposure through S&P 500 and Nasdaq tracker funds-which means they will be participants in this rebalance whether they want to be or not. Our job is to make sure clients understand what is happening under the hood of their portfolios, and to position around the rotation rather than be passively dragged through it.”
— Michele Carby, Managing Partner – Wealth Management
SpaceX is just the first. OpenAI and Anthropic both feature on the list of trillion-dollar private companies expected to come public over the next 12 to 24 months. Venture capitalist Paul Kedrosky estimates the combined market-cap impact could reach $5 trillion, a once-in-a-generation rebalance of what index investing actually means.
Trump’s $2 Billion Quantum Bet: What Does It Mean for the Next Tech Cycle?
If Nvidia’s print confirmed the current compute cycle, the announcement that followed confirmed the next one. On Thursday 21 May 2026-less than 24 hours after Jensen Huang told investors that “Agentic AI has arrived”, the US Department of Commerce signed nine letters of intent providing $2.013 billion in federal incentives under the CHIPS and Science Act to America’s leading quantum computing companies.
The breakdown:
- IBM — approximately $1 billion to build Anderon, America’s first pure-play quantum chip foundry, matched dollar-for-dollar by IBM itself
- GlobalFoundries — $375 million for a secure domestic quantum foundry
- D-Wave Quantum, Rigetti Computing, Infleqtion, Atom Computing, PsiQuantum, and Quantinuum — approximately $100 million each
- Diraq — $38 million
Critically, the federal government will take minority equity stakes in each company, the same industrial-policy model first applied to Intel in August 2025, now extended to an entirely new sector.
The market reaction was immediate: Rigetti finished up 30.57%, D-Wave rose 33%, and Infleqtion closed up 31.44%. IBM gained more than 12%. Together, the three small pure-plays added close to $5 billion in market value in a single session.
“This is the moment quantum stopped being a science project and became an industrial-policy priority. The equity-stake structure means the US government is now financially aligned with the success of these companies-which materially changes the risk profile for private investors who hold them alongside Washington. For our clients, this is not a reason to chase 30% one-day moves in micro-cap quantum names-it is a reason to think carefully about how thematic exposure to the next compute paradigm fits into a long-term portfolio.”
— Payal Trehan, Partner & Senior Investment Strategist
A word of honesty on the fundamentals: D-Wave took in just $2.9 million in revenue in Q1 2026 and lost $18.4 million. Rigetti generated only $7.1 million in revenue for all of 2025 while posting a net loss of $216 million. The federal endorsement is real. The commercialisation timeline for utility-scale quantum computing is still measured in years, not quarters.
Our View: Why We Remain Constructively Positioned
We remain constructively bullish on the S&P 500, the Nasdaq 100, and the SOXX semiconductor index through the remainder of 2026 and into 2027. The post-Nvidia tape – combined with the SpaceX prospectus and the quantum announcement-is doing precisely what a healthy bull market does: absorbing a generational earnings print, broadening leadership into new thematic verticals, and beginning to price the next decade of innovation.
Wall Street year-end S&P 500 targets now cluster in the 7,500 to 8,100 range. With the index currently trading around 7,400 to 7,500, that implies meaningful additional upside-although the SpaceX rebalance dynamic is likely to introduce more dispersion within the index than we have seen in any prior 12-month period.
“This is exactly the environment in which our cross-border, cross-asset philosophy does its best work. You stay invested in the index leadership through quality exposure. You add measured thematic exposure to the next compute cycle-quantum, AI infrastructure, the energy build-out that supports both, and selectively the space economy as SpaceX brings it onto the public market. You diversify across geographies because no single-country thesis carries a portfolio forever. And you build a structural hedge through alternatives and quality fixed income so that when the next surprise hits-and it will-you do not have to make emotional decisions.”
— Michele Carby, Managing Partner – Wealth Management
What Are the Risks We Are Watching Right Now?
Constructively bullish does not mean blind. There are six specific risk factors our investment team is actively monitoring.
1. Concentration Risk — The “One Big Trade” Problem
Nvidia is estimated to be as much as 50% of S&P 500 performance weight. Goldman Sachs has explicitly warned that the AI-driven rally is creating growing concentration risk, with market gains heavily weighted in AI and tech stocks. This is why we have been actively rebalancing toward quality outside the AI complex, international equities, and structured exposure to themes correlated to the productivity tailwind from AI — but not single-stock dependent on Nvidia.
2. Valuation Sensitivity to Yields and Fed Policy
At elevated multiples, every basis point of movement in the 10-year Treasury yield matters more than it would in a normal market. If inflation surprises to the upside again, as it did in April-and the Fed is forced to delay cuts or signal a hike, the discount-rate compression mechanism that drove the spring pullback will reassert itself. Our team is watching the next two CPI prints closely.
3. AI Return-on-Investment Disappointment
The bull case rests on a simple proposition: the trillion dollars of AI capex being deployed will generate revenue and productivity gains commensurate with the spend. If the market begins to doubt that proposition, if hyperscaler revenue from AI services disappoints or a major customer pauses capex, multiple compression in the AI complex could be sharp.
4. Geopolitics — Iran, China Export Controls, and the Tech Cold War
The Iran situation is improving but not resolved. A breakdown in negotiations could re-push oil back through $110 and reignite the inflation transmission mechanism. Nvidia’s H20 export issues with China remain an open question. The quantum announcement actively intensifies the semiconductor cold war dynamic-Washington is explicitly framing it as a response to China’s national-level quantum programme. Expect more friction, not less.
5. The SpaceX IPO and Passive-Flow Rebalance Risk
As discussed above, JPMorgan estimates that SpaceX’s fast-tracked index inclusion could force passive funds to sell roughly $950 billion of existing mega-cap holdings. Even if SpaceX prices and trades flawlessly, the mechanical rebalance has the potential to introduce 5 to 10% drawdowns in individual mega-cap names purely on technical grounds. OpenAI and Anthropic IPOs would compound this dynamic further. This is the strongest argument we have made for active, quality-tilted equity allocation over a pure index tracker in the current environment.
6. Government-as-Shareholder — A New Structural Variable
The quantum announcement is the latest example of the Trump administration taking direct equity stakes in strategic technology companies, across semiconductors, steel, nuclear energy, rare-earth minerals, and now quantum. Federal endorsement compresses the cost of capital and signals priority customer status. But government shareholders have political objectives that do not always align with private-market shareholders. That is a real factor for thematic portfolios to model.
What Does This Mean for Our Clients?
The takeaways from this remarkable 48-hour window are clear:
- The AI capex cycle is real, sustained, and translating into cash flow. This is not 1999.
- The space economy is coming public at unprecedented scale. SpaceX’s IPO is the first of multiple trillion-dollar private companies coming to market over the next 24 months.
- Quantum has moved from research curiosity to industrial-policy priority in a single week.
- The earnings backdrop has broadened. 83% of S&P 500 companies beat in Q1 2026. Full-year growth revised to 28.6%.
- Passive-flow rebalance risk is now a real factor. Pure index trackers may face mechanical drag as SpaceX is admitted. Active, quality-tilted exposure has rarely mattered more.
- Six watch items remain on our risk dashboard. None are flashing red today. All deserve a sober plan.
And the line every client will recognise from our conversations over the years: stay invested, and keep investing through this. The investors who try to time entries and exits around quarterly prints, IPO listings, or single-day thematic moves almost always end up worse off than those who simply stay in sync with the market and let the compounding do its work.
Let Us Talk
Periods like this one, where a generational earnings print, the largest IPO in US history, a new federal industrial-policy regime, and an emerging market-structure rebalance all collide in a single week-are precisely when the value of a long-term wealth management partner becomes clearest.
If you would like to discuss how your portfolio is positioned for the post-Nvidia environment, what the SpaceX listing means for your existing index exposure, or how a structured cross-border strategy can help you compound wealth through the next decade, our team is here to help.
We offer a complimentary 30-minute consultation to review your current financial position and identify practical steps to strengthen your long-term wealth strategy.
This article is provided for informational purposes only and reflects the views of The Michele Carby Practice as at May 2026. It does not constitute investment advice or a recommendation to buy or sell any specific security. Market views expressed are subject to change. Past performance is not indicative of future results. Investors should consider their own circumstances and consult a qualified professional before making investment decisions. The Michele Carby Practice operates as an autonomous partnership under the Holborn Assets Group.
