04/20/2026 ValuEngine Weekly Market Summary & Commentary
Weekly Market Recap – Week Ending April 17, 2026
U.S. equity markets extended their upward momentum this week, led by strong gains in technology and growth-oriented segments, as reflected in the sharp advances in the Nasdaq-100 and semiconductor-linked names. Broad-based indices also moved higher, supported by resilience in large caps and selective strength across communication services and consumer discretionary sectors. However, performance remained uneven beneath the surface, with energy and certain defensive sectors lagging, indicating a continued rotation rather than a uniform rally. Over the past month, the leadership in high-beta and innovation-driven stocks has been particularly pronounced, suggesting improving risk appetite, though sector divergences highlight that investors are still navigating a mixed macro backdrop.
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In the below tables we use major ETF’s as a proxy for some major indexes as well as each of the sector groups into which we divide the overall markets. Tracking these over time provides a more defined picture of the US markets than simply tracking major indexes. This is followed by notable individual stock movers over the past month, and finally our full strategy outlook.
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Strategy Note
Overvaluation is Back – Will “AI Stocks” Be the Main Target Again?
Wall Street has referred to last week’s rally as the “war trade unwind” with S&P 500 entering the week at record highs. It has surged more than 13% in the past three weeks. Winners well outpaced losers. The Energy sector was the major exception with the StateStreet Select Energy Sector SPDR (XLE) down 4.4%.
The inflation issue is not going away any time soon. Even if the Iran crisis is mollified, not a given in the wake of major static in the weekend’s negotiations, recent numbers have been going in the wrong direction. March CPI saw its largest monthly gain since 2022.
Beyond resolving geopolitical issues, the main fear in the stock market looking at the week ahead is overvaluation. The Chartered Market Technicians Association (CMT) estimates that SPY, StateStreet’s standard-bearer ETF Trust for the S&P 500, has transitioned from oversold to overbought in just 12 days. By our proprietary valuation model, 60% of the stocks ValuEngine covers are now overvalued as compared with 52% just three weeks ago. It is using this lens that portfolio managers will use their tools to evaluate this week’s earnings announcements as we head into peak season.
93 S&P 500 companies will report in the upcoming week. The largest corporate names include the big four of defense, GE (GE), RTX Corp. (formerly Raytheon) (RTX), Lockheed Martin (LMT) and Boeing (BA). RTX is the highest rated of the group with a 5 (Strong Buy) for price growth over the next 1- 12 months. After that GE is rated 4 (Buy) while LMT and BA are both rated 3 (hold). The list of other corporate giants reporting includes IBM (IBM), Tesla (TSLA). American Express (AXP), AT& T (T) and Procter and Gamble (PG). All five stocks are rated 3 (Hold).
When it comes to the overvaluation issue, TSLA figures to be in the spotlight again as the lone “Magnificent Seven” stock reporting this week. These stocks, considered by many to be overvalued, have been targeted during the prior 9 months or so as sources of funds for value and small cap stocks. These stocks are also associated with the “AI boom” which many analysts feel have gotten far ahead of themselves. Some have gone as far as to assert we are in a new tech bubble. We are not so sure so let’s take a look.
Of the Mag 7 stocks, only Nvidia (NVDA) and Google (GOOGL) are rated 5 (Strong Buy) while Amazon (AMZN) is rated 4 (Buy). While AMZN is 10% overvalued and GOOGL is 40% overvalued by our valuation model, NVDA is actually rated 16% undervalued by our model’s metrics. Those three stocks, along with Meta Platforms (META) are probably the most involved with actual AI prototypes, model-building, testing, and related activities. META, however, is rated 3 (Hold). So are the remaining stocks in the group, Apple (AAPL), Microsoft (MSFT), and Netflix (NFLX).
Reverting to the stocks that are actually reporting this week, there are a few somewhat smaller stocks that get our highest rating of 5 along with NVDA and GOOGL. They are chipmaker Intel (INTC), Lam Research ( LRCX) and Vertiv Holdings (VRTV).
We find LCRX especially interesting in its AI involvement. It is a “foundational” AI play because it provides the physical tools required to manufacture the hardware that runs AI models. The Silicon-Valley-based firm is a leader in enabling high bandwidth memory (HBM), intrinsic to 3D stacking where memory layers are stacked on top of each other. Beyond that, Lam is a leader in manufacturing next-generation “Angstrom-Era” chips with atomic layer disposition and Etch technologies that facilitate customers’ (e.g., Taiwan Semiconductor) ability to sculpt transistors at the atomic level. What is more, Their “ALTUS Halo” tool uses molybdenum, a metal that reduces resistance in nano-scale wires by 50%, enabling the faster processing speeds AI requires. There is a lot more to the story of their leadership in these aspects of the industry that may be worth our readers’ time in checking them out as a company even if they find the stock too overvalued. Indeed, our valuation model ranks it in the most overvalued 10% of our coverage universe.
Ohio-based Vertiv (VRTV) is also heavily involved, serving as a critical infrastructure partner for AI data centers by providing advanced cooling and power management technologies. The firm collaborates with leaders like NVDA and INTC to support high-density AI computing, offering solutions such as liquid cooling for accelerating AI deployments. All four of these companies are expected by our model to gain more than 15% with VRTV forecast to gain 34% in the next 12 months. Once again, the company’s intrinsic importance to AI advancements make it susceptible to huge overvaluation. Like LCRX, VRTV is in the most overvalued 10% while Intel’s overvaluation is even greater, ranking it in the top 4%. The conclusion is that if you believe in using our models in tandem as ValuEngine Capital Management LLC does, NVDA is the bargain of the group to get top forecast price appreciation at a below-average valuation. It’s also the only one of the quartet not reporting this week as that report is scheduled for May. Regardless, for price growth, all four are probably worth some research as they are clear leaders in at least one aspect of AI.
Going back to general market overvaluation, whether this will be the week that overvaluation wreaks havoc on some major market stocks is a question we cannot answer. For now, we focus on the forecast earnings growth leaders with a sharp eye on the balances between expected return and anticipated price volatility.
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