Risk stocks are back in vogue as the S & P 500 sits on the cusp of a new high. Animal spirits are again taking the market reign as investors’ fears have taken a breather, largely due to President Donald Trump walking back some of his most extreme tariff policies and the administration making progress on trade war de-escalation efforts. A boost in corporate artificial intelligence spending has also accelerated gains and put the index back in the green for the year. The S & P 500 on Wednesday hovered just below 6,147.43, its intraday record set on Feb. 19, and also within reach of its closing all-time high of 6,144.15. At its April 8 low, the index saw a sharp sell-off that took it below 5,000 points for the first time in nearly one year. Leading the S & P 500’s swift comeback since its early April bottom are the market’s riskiest, highest beta tech and AI-related stocks. Coinbase , Palantir Technologies and Vistra are among the index’s top gainers during this revival, but some of these leaders could take a slight step back after their recent runup. Coinbase shares have ripped higher by more than 127% since April 8. The stock has benefited from Trump’s love for cryptocurrencies and surged after the Senate passed the GENIUS Act , which would establish a federal framework for U.S. dollar-pegged stablecoins. Coinbase, which co-founded the USDC stablecoin, jumped on the back of the announcement. Stablecoins are Coinbase’s biggest revenue driver after its trading business. Shares of Coinbase are up roughly 41% year to date. After its recent tear, however, analysts polled by Wall Street have an average price target that implies the stock could lose more than 17%. Some pockets of Wall Street remain bullish. Bernstein on Wednesday reiterated its outperform rating and hiked its price target to $510, which implies about 48% potential upside from Tuesday’s close. Several energy plays have ripped higher since early April. Vistra, Constellation Energy , GE Vernova and NRG Energy have each been considered AI energy plays by investors, and interest is picking back up as hyperscaler spending levels remain strong. NRG Energy, for one, earlier this year announced a venture to build four new natural gas power plants in the U.S. to generate power for AI data centers. Constellation Energy has also turned its attention to data center projects that connect to the U.S. electrical grid, rather than fueling warehouses directly from the company’s own power plants. Shares of NRG and GE Vernova have each rallied nearly 80%, while Vistra has bounced back roughly 82% between April 8 and June 25. Chipmakers including Microchip Technology and Advanced Micro Devices have also ridden the AI wave, but could be poised for muted gains ahead, according to analysts’ consensus targets on each stock. The stocks have jumped about 99% and 77%, respectively, since April 8. Palantir , another Wall Street favorite known to be a high-risk, high-reward name, could also be overvalued as analysts see significant declines ahead of about 25%. Shares of the data analytics software vendor have soared nearly 89% this year — with about 85% of those gains occurring since the market’s April bottom — as its contracts with the U.S. government and defense businesses surge.
