T-Bone May: The Scorecard

The best-performing large weight in the book, and the most surprising. Ford entered May looking like a tariff casualty. It exited looking like a different company. The catalyst stack was unusual: a Q1 earnings beat with EPS of $0.66 against a $0.18 consensus (nearly 4× the estimate), a $1.3 billion noncash tariff benefit from a Supreme Court IEEPA ruling, and a surprise strategic pivot into battery-as-energy-storage via a new Ford Energy subsidiary targeting AI data center power demand. Ford went from auto company to energy infrastructure play in 30 days. Shares hit a three-year high.

The momentum screener had this one right. High RS, breaking above a multi-month base in late April, strong volume. The thesis shifted under the stock mid-month, but momentum traders who held through the news were rewarded. Contribution of +3.31% makes Ford the single largest contributor to May returns.

The highest percentage return in the book, and the one with the most volatile path to get there. ASTS had everything the momentum screener looks for: accelerating RS, above-average volume, and a story that keeps getting bigger. In May, that story got formally validated — AT&T, T-Mobile, and Verizon jointly spotlighted the ASTS carrier JV, and the company reaffirmed $150–$200M in 2026 revenue despite a wider Q1 loss. A 2× leveraged ETF (ASTY) launched on May 21, which added retail fuel to an already hot name.

The brutal footnote: ASTS fell 18.5% on May 29 when a Blue Origin rocket exploded, raising concerns about satellite launch timelines. The position was up more than 80% intramonth before giving back nearly a third of those gains. Still finished at +59.9%, but the lesson is that single-event risk in space stocks is real and unhedgeable in a long-only book.

Quantum computing has been the kind of theme that looks right on paper and then doesn't do anything — until May, when it did everything. IonQ released Q1 2026 earnings on May 6 against consensus revenue of $49.7M and demonstrated the commercial launch of quantum-based synthetic aperture radar (SAR) for ground monitoring. The 256-qubit system targeting late 2026 remained the headline growth catalyst, but what drove the stock in May was a broader institutional rotation into quantum names ahead of anticipated near-term commercial contracts.

The screener caught this as an acceleration signal. Volume ratio and 20-day RS were both elevated at entry. The position was undersized at 2.7% — this is the kind of move where the regret isn't being wrong, it's being right but small.

Credo entered May on the back of a Q3 fiscal 2026 earnings beat, with Q4 guidance of $425–$435M in revenue — well above Street expectations. The stock was Jefferies' high-conviction Franchise Pick, with a $212 consensus target. The momentum signal was clean: AI copper-to-optical interconnect demand, expanding gross margins, and accelerating institutional coverage. This is exactly what the screener is supposed to find — a fundamentals-driven acceleration that has already started showing up in price. Rothschild & Co had a $206 target; the stock moved toward that in a month.

Q4 FY2026 earnings are due June 1 — right at the end of the hold period. The pre-earnings run was fuel; the question is whether the result confirms the move or reverses it for the next watchlist.

GFS had the cleanest catalyst stack of the month: a Q1 EPS beat ($0.40 vs. $0.35 consensus), a Q2 guidance range above expectations, a new $0.12 quarterly dividend with a 50% FCF return framework, and a $375M CHIPS Act letter of intent earmarked for quantum computing hardware manufacturing. The stock was up 11.66% in a single session on May 21. Multiple analysts — Baird, Susquehanna, Cantor, Evercore, Deutsche Bank — raised price targets simultaneously, tying the story to AI, silicon photonics, and "physical AI" infrastructure.

The screener had GFS right. High RS entering May, consistent with a name building a base before an institutional catalyst. The dividend announcement caught most people off guard — it signals management confidence and a maturing cash profile that the market hadn't fully priced.

The tariff reversal trade played out cleanly in Alcoa. The broader easing of trade tensions in May — particularly around aluminum imports — provided a direct tailwind for domestic producers. AA moved from the $62 range to nearly $78, adding 24% in a month with no single company-specific catalyst, just a favorable macro shift in trade policy that the screener's momentum signal had already anticipated. The position was correctly sized small at 2.2% given the commodity-driven nature of the trade.

Steel Dynamics ran on the same tariff-reversal trade as Alcoa, plus its own near-52-week-high momentum. The stock closed May at $260, barely below its 52-week high of $259.91 (briefly eclipsed intramonth). The screener flag was accurate — STLD had strong RS and was in a confirmed uptrend — but it's marked "partial" because the fundamental picture is more mixed. GF Value has the stock 69% above fair value, and the domestic steel thesis is entirely dependent on trade policy remaining favorable. It worked in May; it's a thesis you need to hold loosely.

TTM Technologies is a PCB manufacturer that benefits from defense and aerospace re-shoring demand. The +9.3% move was steady and unexciting — no single catalyst, just consistent bidding in a name with defense exposure and domestic manufacturing leverage. The screener's momentum signal was reasonable but not a high-conviction setup. It participated in the risk-on tape without distinguishing itself.

Generac beat Q1 2026 estimates with adjusted EPS of $1.80 and revenue of $1.06B (+12% YoY), driven by data center backup power demand. Jefferies raised its target to $302. The stock moved from $259 to $278, a solid +7.2% — but meaningfully below what the high-beta momentum names delivered. GNRC is a partially-aligned momentum trade: real fundamental momentum (data center power is a structural tailwind), but the RS signal was weaker than the pure-play tech names. It earned its place without distinguishing itself.

Expeditors moved with the general risk-on and trade-resolution tape in May. As a freight forwarding and logistics company, EXPD benefits when trade volumes accelerate and tariff uncertainty resolves. The +7.3% return is respectable in a vacuum but at the low end relative to the screener's other picks. This one was in the "momentum in the right zip code" category — logistics is adjacent to the re-shoring and trade themes — but the RS signal didn't differentiate it as a top-tier setup. A filler position that paid its way without earning a spot in the June rotation.

Merck was the largest position by a wide margin — 34.6% of the book — and it delivered exactly what a defensive large-cap should deliver in a risk-on month: below-market returns with low volatility. The +5.9% was driven by an FDA Breakthrough Therapy Designation for calderasib, a positive CHMP opinion backing KEYTRUDA plus Padcev for bladder cancer, and a $6B debt offering that signaled confidence in the pipeline. The stock moved from $112 to near $119 steadily and without drama.

The screener partial-alignment is correct. MRK had legitimate momentum signals — consistent RS, sector rotation into healthcare — but it's fundamentally a defensive hold in a momentum book. Allocating 35% of a momentum portfolio to a pharma large-cap is a structural choice about risk, not a momentum call. It acted as a ballast that protected the downside while limiting the upside. Given the month's beta, that tradeoff cost about 2–3% of total return relative to deploying that capital into the high-RS names.

Zoom lost the momentum trade in a month where everything else was winning it. There was no single catalyst for the decline — just a tape that had no interest in old-economy SaaS with declining pricing power and AI substitution risk on the horizon. ZM's revenue growth has stabilized but it isn't accelerating, and in a momentum book, flat is a short. The screener signal was marginal at entry and the position worked against the portfolio all month. Small loss, but a reminder that the exit discipline on momentum screens should be as tight as the entry signal.

Synopsys was the most frustrating position in the book: a legitimate business, real AI exposure, strong long-term fundamentals — and a month that went exactly the wrong way. The company beat Q2 estimates with non-GAAP EPS of $3.35 and revenue of $2.28B, but the stock fell 9.1% on May 28 because investors focused on weakness in the Design IP segment (hurt by China export restrictions and resource reallocation toward AI). The Ansys acquisition integration is adding complexity, and the premium valuation (P/E ~75×) left no room for a mixed quarter.

An 11.5% position in a name that dropped 9% on its earnings day is the kind of event that turns a good month into a mediocre one. SNPS didn't belong in a momentum book at this weight. The RS signal was legitimate, but the position sizing amplified single-event risk. The screener found the right sector (EDA/semiconductor software) but the wrong moment in the cycle for this specific name.

The worst trade of the month, and the one that cost the most. Starbucks entered May at $105, held a 13.5% position weight, and spent 31 days declining to $99. The paradox: SBUX actually beat Q2 estimates (adjusted EPS $0.50 vs. $0.44 consensus, revenue $9.53B vs. $9.17B expected) and raised guidance to 5%+ comparable store sales growth. None of it mattered. The stock has been fighting Brian Niccol's turnaround narrative for six months, and the market isn't buying it at 20× earnings while the turnaround is still unproven.

Starbucks didn't belong in a momentum screen. It was a value-and-turnaround thesis wearing momentum's clothes. RS was elevated in early April — a sucker's signal off a technical bounce — and the underlying fundamentals don't support a sustained trend. Combined with SNPS, the two misaligned large positions cost the portfolio approximately 1.1% in total return. In a momentum book, that's unacceptable when the rest of the screen is working this well.