AI Rally May Have Gone Too Far With Some Stocks Up 70% in a Month

On the May 8 episode of CNBC’s Halftime Report, the panel openly questioned whether the AI-driven rally has stopped discriminating between core AI plays and merely AI-adjacent names. One of the cleanest examples is Qualcomm (NASDAQ:QCOM | QCOM Price Prediction), where the stock gained around 70% in a month despite posting merely decent results and guiding lower for the next quarter. The host’s framing captured the concern: “We’re not even discriminating anymore between AI and tech. If you are in AI, you are riding this wave to new highs.” A cautious caller summed it up: “There are some parts of this market that are pretty darn frothy.”

The AI Trade is Broadening Fast

The rally has moved well beyond the obvious AI leaders. Beyond QCOM, other stocks have seen incredible recent gains, including Datadog (NASDAQ:DDOG) up 68%, Oracle (NYSE:ORCL) up 36%, Fortinet (NASDAQ:FTNT) up 30%, AppLovin (NASDAQ:APP) up 29%, and CrowdStrike (NASDAQ:CRWD) up 20%. Software names once feared dead by AI disruption have roared back, and cybersecurity stocks once seen as vulnerable to Anthropic have rebounded sharply.

Microsoft (NASDAQ:MSFT) shows the rally has been uneven. The stock has recovered 17% since March lows but remains 25% below its highs, even as its AI business hit a $37 billion annualized run rate, up 123% year over year.

The Bull Case

The strongest bull argument from the panel came down to valuation and earnings growth. The 493 stocks outside the Mag 7 are trading at 19 times earnings with earnings growth approaching 20%. One bull on the show argued that AI gains are flowing into “the rest of the economy, whether it’s financials that are financing everything” or materials feeding data center buildouts. “The market is saying, look, we’re going to be a little more in tune with what the corporate narrative is.”

Earnings Now Need to Catch Up

The forward-looking risk lands on software. Names like DDOG, ORCL, APP, FTNT, and CRWD now need earnings delivery to sustain these moves beyond multiple expansion. Oracle’s RPO already sits at $553 billion, up 325% year over year, and Datadog raised FY26 revenue guidance to $4.30B-$4.34B. Valuations outside the Mag 7 still look reasonable in aggregate, but individual names that have run 30% to 70% in a month now carry specific earnings expectations they now have to meet.