The Comeback Nobody Saw Coming
Three weeks ago we wrote that AI stocks were down while the fundamentals had never been stronger. We called the gap between prices and fundamentals the signal worth paying attention to.
This week, that gap started closing.
The Nasdaq-100 has erased all of its Q1 losses and rallied 11% in April alone. The Global X AI ETF — a broad basket of AI hardware and software companies — is up 14% this month. CoreWeave, the AI data center company that went public in March, has gained 49% in April. The investors who stayed focused on fundamentals while sentiment was negative are being rewarded.
What Drove the Reversal
Two things moved markets this week. A ceasefire in the Middle East reduced geopolitical risk and boosted investor confidence broadly. And underneath that, the AI earnings story continued to strengthen.
CoreWeave's revenue backlog — the confirmed future orders on its books — now stands at roughly $100 billion. Trading firm Jane Street announced it will spend $6 billion on CoreWeave's cloud platform to develop and scale its AI services. Microsoft reported that daily users of its Copilot AI assistant have nearly tripled year over year, with 15 million paid enterprise seats. These aren't projections. They're current numbers.
The Bigger Picture
Q1 2026 saw global startup funding hit a record $297 billion — with AI startups absorbing $242 billion, or 81% of all venture capital deployed globally. Four of the five largest venture rounds in history closed in a single quarter. The capital flowing into AI infrastructure isn't slowing — it's accelerating.
The lesson from April is one worth remembering: the best time to pay attention to a market is when everyone else has stopped. The fundamentals were strong in February when the headlines were cautious. They're still strong now that the headlines are optimistic again.
The story hasn't changed. The sentiment has.
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