21 Apr 20th April 2026

Markets Year to Date

Markets are convinced the war is over. Or at least the impact of it will not make any difference.

In the short-term markets are driven by emotion, which is why they never make sense. But in the longer-term markets are driven by fundamentals. As investors we need align ourselves with the long-term themes and direction and use the short-term moves as entry points. Exit points are harder because the long-term drift higher makes picking tops almost impossible.

The VIX is back under its long-term average of 19 which says the worst is over. But it is still some way off the recent lows of 15 which says stock prices can still go higher from here.

The US economy is humming along nicely and even if Oil stays $90-$100 it will not be enough to derail it.

The concerns now are inflation, oil prices and questions around Gen AI business models. The first two issues are resolvable either with time or policy to address them. The third seems tickier to assess but history shows technological advances drive most stock market gains over the long run.

We hit the lows at the end of March and April has been one way traffic higher. The Nasdaq posted 13 days straight of gains. And it was led by Big Tech. History suggests US Big Tech is still oversold as compared to the index and will likely outperform over the next 3-4 months.

But there has been some divergent between the Big 7. If we look at Year-To-Date returns we can see two distinct groups

• Nvidia +8.3%
• META +1.6%
• Amazon +7.6%
• Alphabet +6.9%

• Microsoft -13.6%
• Apple +0.4%
• Tesla -12.7%

The top 4 all have distinct AI strategies and products. The bottom 3 face more of a challenge.

Apple has been very slow to the AI party with no real strategy in place. Rather it is using other companies AI models.

Microsoft is heavily focussed on enterprise customers. It is integrating AI inside its products but is not really developing anything of its own. That makes it more open to disruption by a competitor. I am particularly looking forward to the Anthropic IPO this year as that offers a more concentrated bet on AI within the enterprise sector. I am keen to see how investors treat Microsoft at that point.

Then we have Tesla. The problem for Tesla is it does not have the cashflow to compete with the others in the AI space. Plus, once SpaceX lists and investors have a choice of which Elon company they follow, it will be interesting to see how this stock behaves. I suspect poorly.

As you can see, we are starting to see winners and losers in the AI race. We are at the beginning of AI 2.0. Back in 2023 everyone benefitted from AI. Now we are at the stage of separating winners from losers.

On the topic of AI winners I want to share some history with you.

Back in February of 2000 we were near the end of the dot.com boom. A company called Netj added .com to its name. In doing so it also made a statement that said:

 “The company is not currently engaged in any substantial business activity and has no plans to engage in any such activity in the foreseeable future.”

But the stock price jumped and added $100million to its valuation. Just from adding a .com to its name

It wasn’t the only one. AI tells me 95 other companies did the same thing and the average stock price gain was 74%.

That was 26 years ago in the height of the dot.com mania. Things are different now right?

Last week a company called Allbirds made an announcement. Allbirds made shoes. The announcement was it has sold all of its shoe making assets and will now focus on AI. Not exactly sure what AI. Just something AI. The stock jumped 400%.

But don’t go out chasing this one as we all know what will happen.

Here is another example. Algorhythm Holdings was a little known karaoke machine maker. It announced there would be no more singing and instead they would make AI for logistics companies. Makes complete sense. Huge crossover of skills there. Anyway, this is what happened to the stock price.

Lastly this week, a little bit of humour. At least, it amuses me. There is a belief that being added to an index is good for a stock. Back in 2020 the Dow Jones Industrial index kicked out Exxon Mobil and added Saleforce in its place. This is what happened to the two stocks since

Warning

Stock values can go down as well as up. It is possible to lose 100% of your investment in a stock. Any advice given by Capital 19 is general advice only and does not take your personal circumstances into account and might not be suitable for you.