In May, the S&P 500 rallied 5.15 per cent, however, breadth was quite narrow with just three of the 11 sectors delivering positive price returns.
Sectors that closed out the month in the green were technology, consumer discretionary and health care with gains of 15.91 per cent, 2.56 per cent, and 2.31 per cent, respectively.
Amongst the sector detractors were energy, utilities and consumer staples with declines of 6.08 per cent, 5.52 per cent and 3.29 per cent, respectively.
The top 10 performers in the S&P 500 Index in May were:
- Dell Technologies Inc. (DELL-N), up 101 per cent
- Micron Technology Inc. (MU-Q), up 88 per cent
- Datadog Inc. (DDOG-Q), up 87 per cent
- Super Micro Computer Inc. (SMCI-Q), up 68 per cent
- Crowdstrike Holdings Inc. (CRWD-Q), up 64 per cent
- Fortinet Inc. (FTNT-Q), up 64 per cent
- Netapp Inc. (NTAP-Q), up 57 per cent
- Palo Alto Networks Inc. (PANW-Q), up 57 per cent
- Sandisk Corp. (SNDK-Q), up 55 per cent
- First Solar Inc. (FSLR-Q), up 52 per cent
Every stock on this list of top performers is from the technology sector. Not surprisingly, the information technology sector has the highest forecast earnings growth rate for the first quarter of 2026, which is pegged at 56.4 per cent.
Drilling down to the sector’s sub-industries, the semiconductors and electronic components have the highest expected earnings growth rates, which currently stand at 117.9 per cent and 54.7 per cent, respectively.
Earnings growth is expected to surge in 2026 before moderating in 2027. Year-over-year earnings growth is anticipated to come in at 25 per cent in 2026 and 16.1 per cent in 2027. Year-over-year earnings growth is forecast to expand 29.3 per cent in the first quarter of 2026, 22.4 per cent in the second quarter of 2026, 24.4 per cent in the third quarter and 22.9 per cent in the fourth quarter of 2026.
According to a May 29 LSEG report, the forward four-quarter price-to-earnings multiple for the S&P 500 stood at 21.6 times, up from 21 times as of May 1.
For the first five months of 2026, the S&P 500 Index delivered a double-digit price return of 10.73 per cent.
Now, here’s a look at analysts’ target prices, recommendations, forecast returns and yields for all securities in the S&P 500 grouped by sector and ranked according to their expected price returns (excluding dividend and distribution income).
The posted target price for each security is an average of all available target prices from analysts. A target price typically reflects an expected share or unit price 12 months from now based on an analyst’s financial modelling, such as a discounted cash flow or sum-of-the-parts model. Data is as of May 29.
It’s important to note that high target prices, which imply stellar returns that seem unbelievable may be just that - unrealistic. At times, when a stock price falls analysts may maintain their bullish expectations, inflating the forecast return. In addition, an outlier (extreme target price) can skew the average target price, to the upside or downside, particularly when the number of analysts covering a stock is low. Don’t let a huge projected gain lure you into a position – it is critical to look at the company and industry fundamentals.