The Kobeissi Letter

Investors are buying US software stocks: The Tech-Software ETF, $IGV , has attracted +$1.5 billion in inflows so far in May, the 3rd-largest since November 2025. The fund is now on track for its 4th consecutive monthly inflow, the longest streak since the 2020 pandemic recovery.

Shocking stat of the day: Assets under management (AUM) in the 2x Leveraged Long SK Hynix ETF, listed in Hong Kong, are up to a record ~$10 billion, making it the largest single-stock leveraged ETF in the world. The fund, launched in October 2025, has seen its AUM more than

President Trump is undefeated in the stock market. On May 8th, President Trump told everyone to "go out and buy a Dell." 19 days later, on May 27th, Dell was awarded a $9.7B contract with the US Pentagon. Today, Dell, $DELL , reported stronger than expected earnings and the stock surged +30%. Dell's stock is now up +80% since May 8th, adding +$120 BILLION in market cap. Truly unprecedented.

BREAKING: Dell stock, $DELL , surges nearly +30% after reporting stronger than expected earnings due to AI.

BREAKING: The S&P 500 closes at its highest level on record, now on track for a 9-week win streak.

BREAKING: The S&P 500 surges to its highest level on record on reports that the US and Iran have reached a deal which is pending President Trump's approval.

BREAKING: The US Military has conducted new strikes against Iran after Iran launched drones at ships in the Strait of Hormuz, per WSJ. Details include: 1. US forces shot down Iranian drones and hit a drone-control station at a major port city in southern Iran located on the Strait of Hormuz 2. US officials say the site posed a threat to US forces and commercial traffic in the Strait of Hormuz 3. US F/A-18 jets were used to strike the ground-control unit at the port city in Iran The strikes come amid crucial US-Iran negotiations.

Wall Street is ramping up hedges against Big Tech: The total net notional value of credit default swaps (CDS) outstanding on major tech firms is up +$1.0 billion so far in Q2 2026, to a record $12.5 billion. The total value of debt being insured against default on these companies is up +500% since Q2 2025. Oracle, $ORCL , leads with ~$6.5 billion, followed by Amazon, $AMZN , at ~$2.0 billion, and Alphabet, $GOOGL , at ~$2.0 billion. At the same time, Microsoft, $MSFT , stands at ~$1.0 billion, Meta, $META , at ~$800 million, and Nvidia, $NVDA , at ~$200 million. Furthermore, monthly notional trading volumes of Big Tech CDS trading at Bank of America are up +900% since the start of 2025. For context, most of these CDS contracts did not trade actively until 2025. Corporate borrowing tied to AI is exploding.

Wall Street is ramping up hedges against Big Tech: The total net notional value of credit default swaps (CDS) outstanding on major tech firms is up +$1.0 billion so far in Q2 2026, to a record $12.5 billion. The total value of debt being insured against default on these companies is up +500% since Q2 2025. Oracle, $ORCL , leads with ~$6.5 billion, followed by Amazon, $AMZN , at ~$2.0 billion, and Alphabet, $GOOGL , at ~$2.0 billion. At the same time, Microsoft, $MSFT , stands at ~$1.0 billion, Meta, $META , at ~$800 million, and Nvidia, $NVDA , at ~$200 million. Furthermore, monthly notional trading volumes of Big Tech CDS trading at Bank of America are up +900% since the start of 2025. For context, most of these CDS contracts did not trade actively until 2025. Corporate borrowing tied to AI is exploding.

BREAKING: Snowflake stock, $SNOW , surges over +30% after reporting stronger than expected earnings due to AI.

BREAKING: Semiconductor and semiconductor equipment stocks now account for a record ~18% of the S&P 500's total market cap, the biggest weighting for any single industry group. This percentage has more than TRIPLED since the 2022 bear market. By comparison, at the peak of the 2000 Dot-Com Bubble, Tech Hardware and Equipment peaked at ~26%. Furthermore, the Semiconductor Index, $SOX, relative to the Magnificent 7 is up to 85 points, the highest since mid-2020. This comes as $SOX has rallied +159% since the start of 2025, materially outperforming the Magnificent 7's gain of +30%. This run in semiconductors is unlike anything in market history.

Absolutely insane. Micron's, $MU , rally over the last 12 months makes the S&P 500's historic run look like a rounding error. What a time to be an investor.

BREAKING: Micron, $MU , surges +7% at the open, now up nearly +1,500% in 13 months as its market cap nears $1.1 trillion. The stock was worth just $70 billion in April 2025.

We have been strongly bullish of equities, as posted. Last week, we posted the below alert for our premium members, raising our S&P 500 target to 7,600. That's now +1,200 points since the March 30 low. Subscribe to access our premium analysis below: http:// thekobeissiletter.com/subscribe

BREAKING: S&P 500 futures surge to their highest level on record now up +19.7% since the March 30th bottom.

Truly incredible. Micron stock, $MU , is now up another +6% in overnight trading, adding another +$60 billion in market cap in hours. Just 12 months ago, the entire stock was worth less than $70 billion. Including the gain during regular trading hours, Micron has now added +$220 BILLION today. This makes Micron the 12th largest public company in the world.

Leveraged trading in Asia is more popular than ever: The 2x Leveraged SK Hynix ETF, listed in Hong Kong, has attracted +$1.3 billion in year-to-date inflows. As a result, total ETF assets under management (AUM) are up to $8.0 billion, the highest on record, making it the

AI is increasingly driving market profitability: The S&P 500's net profit margin excluding financials is up to a record ~15%. At the same time, the S&P 500's net margin excluding the Magnificent 7 and tech is down to ~8%, near the lowest since the 2020 pandemic. This marks a

Defensive sectors are experiencing historic relative weakness: The S&P 500 utilities sector relative to the S&P 500 is down to a record low ratio of 0.06. This ratio has declined -40% since the 2022 bear market. Over this period, the S&P 500 has rallied +106% while the

US Treasuries are experiencing the worst bear market in history: The US Treasury Total Return Index has now been in a drawdown for 69 consecutive months, the longest streak in over 100 years of data. The previous record stretch that ended in 2019 lasted for ~30 months. This is also only the 3rd time in history that a drawdown has exceeded 20 months. During the current drawdown, the US Treasury Total Return Index fell as much as -18% from 2020 to 2022. Since then, it has recovered some of its losses, but it is still down -6% since 2020. Meanwhile, the 20+ year Treasury ETF, $TLT , is down -40% since its April 2020 peak. US bonds are more unpopular than ever.

Exactly 4 days ago: "Boy, Micron is great... they could invest over $100 billion in New York." Micron stock, $MU , has now added +$160 BILLION in market cap today alone. The stock is now up +1,350% since April 2025.

You can't make this up: On May 22nd, ahead of the market's 3-day closure, President Trump said "Micron is great" and that the company could invest "over $100 billion" in New York. Today, as markets reopened, Micron's stock, $MU , surged +19%, adding +$150 BILLION in market cap in 1 day. In just 12 months, the stock's value has gone from $70 billion to a record $1 trillion, adding +$930 billion. Truly unprecedented.

BREAKING: Micron stock, $MU , officially hits $1 trillion in market cap for the first time in history. 12 months ago, this stock was worth just $70 billion.

BREAKING: The S&P 500 rises to its highest level on record, now on track for its first 9-week win-streak since 2023.

BREAKING: The total market cap of Taiwan's stock market has risen to a record $4.95 trillion, surpassing India's $4.92 trillion for the first time, making Taiwan the world's 5th largest stock market. Taiwan's market cap has more than DOUBLED since mid-2024, fueled by the AI-led surge in semiconductor stocks. Over this time, Taiwan Semiconductor, $TSM , which accounts for 42% of Taiwan's total market value, has rallied +130%. On the other hand, India’s market cap has dropped -12% over the same period, driven by record foreign outflows due to expensive valuations and a weakening Rupee. To put this into perspective, India ranks as the world’s 6th largest economy, with a GDP of $4.15 trillion, exceeding Taiwan’s GDP of $977 billion by 325%. Taiwan has become a global economic power.

Active managers are significantly underperforming in 2026: Just 25% of large-cap active equity mutual funds are beating the S&P 500 year-to-date, the lowest reading since 2021. This percentage is on track for its 4th consecutive annual decline. Even at the peak of the 2008

BREAKING: Ferrari stock, $RACE , falls over -7% after revealing the design of its first electric vehicle.

US consumer stocks are extremely weak: The equal-weighted US consumer discretionary index relative to the S&P 500 is down to 0.07, the lowest in at least 20 years. Since 2021, this ratio has fallen -42%, dropping below both the 2020 and 2008 lows. Over this period, the S&P 500 has surged +60%, outperforming the equal-weighted US consumer discretionary index by 10x, which has increased just +6%. Meanwhile, US Consumer Sentiment fell another -5.0 points in May after falling -3.5 points in April, to 44.8, an all-time low. By comparison, the S&P 500 is up +17% since March 30th and closed on Friday just 0.5% below its all-time high. The stock market is thriving, but the average American consumer is not.

There has rarely been a market with more opportunity than now. The key to winning in this market? Tune out the noise. As shown in our below, our strategy has returned nearly 5 TIMES the S&P 500 since 2020, at +516.3%. And, we expect a highly eventful second half of 2026.

Short interest on US stocks is at multi-year highs: Short interest in the median S&P 500 stock is up to 3.0% of market cap, the highest since 2012. This is DOUBLE the levels seen during the 2020 pandemic. By comparison, at the peak of the 2008 Financial Crisis, short interest in the median S&P 500 stock stood at 3.8%. Furthermore, short interest among the most heavily shorted 10% of S&P 500 stocks is up to 8.0% of market cap, the highest since 2018. Both metrics are now even higher than during the bear market following the 2000 Dot-Com Bubble burst. Are markets setting up for a short-squeeze?

Shocking stat of the day: Nvidia, $NVDA , now accounts for a record 8% of the S&P 500’s market cap and is now larger than 7 of the index's 11 sectors. The only bigger sectors are Information Technology, Financials, Communication Services, and Consumer Discretionary. Its market

BREAKING: S&P 500 futures extend gains to over +1% on the day and hit the highest level on record as President Trump asks Iran to join the Abraham Accords. That's +$11.3 TRILLION in market cao since the March 30th bottom.

A memory chip fund is now the fastest-growing ETF in history: The Memory ETF, $DRAM , accumulated $6.5 billion in assets in just 27 trading sessions since its April 2nd launch, faster than any ETF in history. By comparison, the Bitcoin ETF, $IBIT , which previously held this record, took 30 trading sessions to cross this threshold. $DRAM is now up +84% since April 2nd, topping a record $10 billion in assets over 30 trading sessions. Furthermore, the fund ranks among the top 10 US ETFs by year-to-date inflows, out of over 5,000 listed funds. $DRAM is also now in the top 20 most traded ETFs by volume, up from the 34th most traded at the start of May. The memory chip trade is hotter than ever.

BREAKING: S&P 500 futures surge to their highest level on record.

BREAKING: US stock market surge in anticipation of a peace deal between the US and Iran after a highly eventful weekend: 1. S&P 500: +0.6% 2. Nasdaq 100: +0.7% 3. Dow Jones: +0.5% 4. WTI Crude: -5.0% 5. Brent: -2.0% 6. Gold: +1.0% We expect a busy week ahead.

Absolutely incredible: Over the last 6 years, the S&P 500 has risen +130% while US Consumer Sentiment has collapsed by -55%, to its lowest since data began in 1952. We are witnessing the formation of the biggest wealth divide in modern history.

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