Latest / Bull Market Conversations with Fexingo: Rallies, Momentum, and Riding Market Strength / How Shopify and CrowdStrike Are Leading the May 2026 Bull Market Surge
Transcript
- Lucas: Alright, Luna, I want to talk about what happened this past week in the market, because I think there's a really interesting pattern underneath the surface. The NASDAQ is up 2.4 percent in the last five days, closing near 27,000. But not every stock is participating equally. Luna: Yeah, I noticed that. The S&P is up 1.4, the Dow is up less than a percent. So it's really a tech-led move. Lucas: Exactly. And within tech, it's very concentrated. Look at Shopify — up 15.3 percent in five days. CrowdStrike up 10.2. Datadog up 11.3. Cloudflare up 11.9. These are not small moves. Luna: Right, and Palantir is up 14.4 percent. Even the ARKK ETF, which holds a lot of these names, is up 7.3 percent this week. Lucas: So the question is: what's driving this? I think there are two main factors. First, the macro environment has settled. The Fed held rates steady at 3.62 to 3.64 percent, and Governor Bowman came out this week warning against rate hikes despite the inflation spike. That gave the market confidence that rates aren't going up. Luna: And when rates are stable, growth stocks with longer duration cash flows tend to benefit. That makes sense. Lucas: Right. But the second factor is more company-specific. These companies — Shopify, CrowdStrike, Datadog, Cloudflare — they all reported earnings recently that showed accelerating revenue growth and expanding margins. That's the kind of fundamental improvement that attracts institutional money. Luna: So it's not just a macro bid. It's a quality bid. Investors are rewarding the companies that are actually delivering. Lucas: Precisely. And I think what's interesting is that this is happening while the broader market is also grinding higher. The S&P is at 7,580. The Russell 2000 is up 1.7 percent this week. So it's not a rotation out of other areas — it's an addition of exposure to high-growth names. Luna: Let's dig into one of those names. Shopify — 15 percent in a week. That's a massive move for a company with a market cap over 150 billion. What changed? Lucas: Shopify reported earnings on May 7th, and the numbers were strong. Revenue grew 26 percent year-over-year, and they guided above consensus. But what really stood out was free cash flow margin — it expanded to 22 percent, up from 16 percent a year ago. That's a big improvement in profitability. Luna: And investors are rewarding that discipline. It's not just about top-line growth anymore. Lucas: Exactly. And CrowdStrike — up 10 percent — they reported May 27th. Revenue grew 28 percent, and they raised their full-year guidance. But the real story is their net new annual recurring revenue, which was the highest in four quarters. That signals that demand for cybersecurity is not slowing down. Luna: It makes sense. With all the high-profile breaches and the move to cloud, companies are spending more on security. CrowdStrike is a direct beneficiary. Lucas: Now Datadog and Cloudflare — they both reported earlier in May. Datadog's revenue grew 24 percent, Cloudflare's grew 28 percent. Both saw strong adoption of their newer products. Datadog's observability platform is becoming standard for cloud-native companies, and Cloudflare's network services are expanding beyond just CDN. Luna: So these are all companies with recurring revenue, high gross margins, and expanding total addressable markets. That's a recipe for sustained growth. Lucas: And the market is rewarding them with higher multiples. Shopify now trades at about 60 times forward earnings. CrowdStrike is around 55 times. Those are not cheap, but in a low-rate environment with stable rates, investors are willing to pay up for quality. Luna: I want to bring in the ARKK ETF because it's interesting. ARKK is up 7.3 percent this week, and it holds a lot of these names — but it also holds Tesla, Roku, Zoom, and others that haven't moved as much. So the ETF's performance is really being driven by these top holdings. Lucas: That's a good point. ARKK is up 7.3 percent, and if you look at the top five holdings, Shopify and CrowdStrike are in there. So the ETF is a proxy for this trade, but it's not as pure as just buying the individual names. Luna: Right. And the question is whether this is sustainable. Are we seeing the start of a new leg in the bull market for growth stocks, or is this a short-term rally? Lucas: I think it's sustainable, but not linear. The macro backdrop is supportive — rates are stable, GDP growth is solid at 2.4 percent real, and corporate earnings are generally beating estimates. But valuations are high, so any negative surprise could cause a sharp pullback. Luna: So it's a 'show me' market. Companies need to keep delivering. Lucas: Exactly. And that's what separates these names from the broader market. They have the fundamentals to back up the price action. I think we'll see more institutional inflows into these names as the year progresses, especially if the Fed remains on hold. Luna: You know, speaking of the show being useful — if today's breakdown helped you think about this rally differently, there's a simple way to keep these conversations ad-free and independent. It's at buy me a coffee dot com slash fexingo. No pressure, just a way to support what we do. Lucas: Yeah, we appreciate every bit of support. It allows us to keep digging into these topics without any outside influence. Luna: Exactly. So back to the data — one thing I noticed is that the NASDAQ is now up over 16 percent year-to-date. That's a strong return for five months. Lucas: It is. And the leaders are changing. Earlier this year, it was all about AI and large caps. Now we're seeing a broadening out into these mid-cap growth names that have strong fundamentals. That's a healthy sign for the bull market. Luna: So if you're an investor, the takeaway is to focus on companies with accelerating revenue and expanding margins, especially in tech. That's where the momentum is. Lucas: And keep an eye on the macro. If the Fed stays on hold and GDP growth remains steady, this environment could persist. But if inflation spikes again and the Fed has to hike, these high-multiple stocks will be the first to get hit. Luna: So it's a balanced outlook. Optimistic but cautious. Lucas: That's the right way to put it. Thanks for digging into this with me, Luna. Luna: Always a pleasure, Lucas. We'll keep watching these names.