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AI Stocks Are Driving the Market to New All-Time Highs

May 14, 2026

Video Transcript

Let's bring in Jay Hatfield, friend of the show.

He is the CEO of Infrastructure Capital Advisors.

Nice to see you again.

Thanks for having me.

What is driving this market rally?

Another round of all-time highs as you and I look up at the big board.

It doesn't seem like overwhelming by side action like Peter Tuchman was just saying, but another round of highs for the Nasdaq and the S&P.

A normal season for the market to stall out.

It doesn't look like it's stalling out, but the equal wave market is flat over the last month, and it's purely what you just described a huge semiconductor AI infrastructure rally that's draining capital out of the rest of the market, including from software.

And a lot including from financials and other old economy stocks.

Jay, what's your take on a hotter than expected CPI inflation print?

We got that across the wire yesterday and then a much hotter than expected PPI wholesale inflation print earlier today.

What does the Fed do with those types of numbers?

Well, Hopefully they remain on hold.

The Fed should not try to close off inflation solely caused by energy, so we're super bearish on inflation only because of energy.

But if you look at the sector where they should tighten, as if housing was surging, and it's not.

So housing inflation as properly measured is down year over year.

So they should stay on hold.

They're already tight.

They're 75 to 100 basis points too high.

It would be a huge mistake to try to kill a global energy shortage by putting the US economy into a recession.

I wonder if S&P 8000.

Still for the most part your year-end target.

That's upside potential off this level of about another 7.5%.

A lot of optimism out there to say, hey, despite all the gains we've had year to date, you think we still have more room to run?

Well, strangely, estimates are up 9% this year already, so our upside target is 8700.

So we actually think 8000. is conservative and that's simply tech driving much higher S&P earnings.

So if you just take 23 times 27 earnings, our target goes from 8000 to 8700.

We may not get if we still have the war going on, we may not get to 23 times, but certainly upside on the 8000 target, and you're seeing.

Here we really can't get this market to go down, mostly because of tech.

Yes, you mentioned the conflict in the Middle East.

Presumably we'll get a lot more announcements coming in the next few days as the president meets with Chinese President Xi Jinping.

How realistic is it that the Strait of Hormuz reopens fully before summer or we see oil drop back down for the most part to where we were back in February, around $70 a barrel?

We're pretty bearish on a negotiated settlement.

We don't think Iran, after 47 years of having the US as an enemy, after we blew up their entire leadership and their family, is going to suddenly get religion and try to negotiate with us.

So we think we're going to have to open it up by force, and the administration is delaying that.

So we're concerned it may take even through the summer to open up.

The street while I have you, let me get your take here.

Expectations for a Kevin Warshch-led Federal Reserve.

He just got the votes in the US Senate a few hours ago.

We're actually optimistic about it.

We've been huge critics of the Fed since the pandemic.

We think he'll reform their forecasting models.

He'll reform the indices, which are deeply flawed, particularly on shelter, and after the strait reopens, start cutting.

Rates.

Before I let you go, a few top stock picks you have things on your radar that maybe the would-be retail investor at home might want to take a closer look at as well.

Well, even though we've been recommending Marvell for 100%, we still see upside to that, up to 210.

We recommended Amazon at 200.

It's at 270, but our target is 370 because of the chip business.

It gives you extra upside.

Both those companies, we're carrying a bubble.

Consensus estimates.

So we estimate, have our own proprietary estimates and particularly in the case of Amazon, it's not as risky a stock, pretty stable, has the retail trades at a much lower multiple than Walmart.

Walmart trades at 45%.

Amazon about 25.

So great way to play both the retail and the infrastructure side.

Jay Hatfield, CEO of Infrastructure Capital Advisors, nice to see you again.

Thanks for joining us.

Thanks for having me on.

All right, come back anytime.

Markets continue to push toward fresh all-time highs, and according to Jay Hatfield, CEO of Infrastructure Capital Advisors, the rally is being driven almost entirely by semiconductor and AI infrastructure stocks. While the Nasdaq and S&P 500 keep climbing, Hatfield pointed out that the equal-weight market has remained mostly flat over the past month, showing how concentrated the gains have become. Investors are pouring money into AI-related companies while sectors like software, financials, and other traditional industries continue to lag behind. Despite this narrow rally, Hatfield says the market still refuses to meaningfully pull back because tech earnings remain incredibly strong.

Hatfield also addressed hotter-than-expected CPI and PPI inflation data, arguing that the Federal Reserve should stay on hold rather than tightening policy further. In his view, current inflation pressures are largely tied to energy costs, not a broad overheating economy, and pushing rates higher could risk sending the U.S. into a recession. He believes the Fed is already too restrictive and says housing inflation has actually cooled year over year. Even with ongoing geopolitical tensions in the Middle East and concerns around oil supply disruptions, Hatfield remains bullish, calling his S&P 500 target of 8000 conservative and suggesting the index could climb as high as 8700 if tech earnings continue accelerating.

Looking ahead, Hatfield remains optimistic on AI-driven stocks, highlighting Marvell Technology and Amazon as two of his top picks. He believes Marvell still has major upside as demand for AI infrastructure grows, while Amazon could benefit not only from its retail dominance but also from its expanding chip business. Hatfield also shared optimism about a potential Kevin Warsh-led Federal Reserve, saying reforms to the Fed’s forecasting models and inflation measurements could eventually open the door for future rate cuts once global energy pressures begin to ease.

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