Gamma — Week of May 23, 2026
Market Overview
As of late May 2026, the U.S. stock market is experiencing a significant upswing, with the S&P 500 recently closing at 7,473.47, marking a notable gain of over 6% for the month. The Nasdaq Composite is also on the rise, currently at 26,343.97, reflecting a robust demand for tech stocks amidst ongoing economic recovery. Inflation rates have increased to 3.8%, the highest since May 2023, prompting discussions around the Federal Reserve's interest rate policy, which remains steady at 3.5% to 3.75%. Market sentiment appears optimistic, buoyed by strong corporate earnings and advancements in AI and tech sectors.
Long Picks
Zscaler, Inc. ZS
Technical Setup
Zscaler is currently exhibiting a 'cup and handle' formation on the daily chart, consolidating just below its 50-day moving average. RSI is neutral at 52, suggesting room for upward expansion.
Fundamental Driver
Zscaler remains a leader in Zero Trust security with fiscal Q3 2026 guidance suggesting revenue growth of ~24% YoY.
Analyst Detail
(1) Core Long Argument: As enterprises shift from legacy VPNs to Zero Trust Exchange architectures to combat AI-driven cyber threats, Zscaler is capturing significant market share. (2) Near-term Catalyst: The company is scheduled to report Q3 Fiscal 2026 earnings on May 26, 2026. (3) Recent Move: The stock has not moved more than 10% in the last 5 days, making this an attractive entry point ahead of the earnings volatility.
View 10 Sources
- https://www.zscaler.com/investor-relations
- https://www.tipranks.com/stocks/zs/forecast
- https://www.earningswhispers.com/stocks/zs
- https://www.marketwatch.com/investing/stock/zs
- https://www.barrons.com/market-data/stocks/zs
- https://www.bloomberg.com/quote/ZS:US
- https://www.reuters.com/companies/ZS.O
- https://www.cnbc.com/quotes/ZS
- https://www.zacks.com/stock/quote/ZS
- https://www.investing.com/equities/zscaler-inc
Arista Networks, Inc. ANET
Technical Setup
ANET is trading in a strong bullish channel, recently bouncing off its 20-day exponential moving average (EMA). MACD has just completed a bullish crossover.
Fundamental Driver
Arista is the primary beneficiary of the AI back-end networking boom, providing high-speed Ethernet switching required for GPU clusters.
Analyst Detail
(1) Core Long Argument: Arista is the 'picks and shovels' play for AI infrastructure, levered to hyperscale cloud growth. (2) Near-term Catalyst: Strong early May earnings led to target upgrades, with an upcoming industry conference in early June expected to highlight its role in AI. (3) Recent Move: The stock has risen ~6% over the past 5 days.
View 10 Sources
- https://investors.arista.com
- https://www.morningstar.com/stocks/xnys/anet/quote
- https://www.seekingalpha.com/symbol/ANET
- https://www.fool.com/quote/nasdaq/anet/
- https://www.investors.com/quote/anet
- https://www.thestreet.com/quote/anet
- https://www.nasdaq.com/market-activity/stocks/anet
- https://www.marketbeat.com/stocks/NYSE/ANET/
- https://www.benzinga.com/quote/ANET
- https://www.wsj.com/market-data/quotes/ANET
Short Picks
Tesla, Inc. TSLA
Technical Setup
TSLA is currently exhibiting an overbought RSI above 75, coupled with a bearish divergence in the MACD.
Fundamental Driver
Valuation remains stretched with a forward P/E exceeding 80x; concerns about the 2026 Capex plan may compress net margins.
Analyst Detail
(1) Core Short Argument: 'Capex Fatigue' is leading to lower earnings revisions as infrastructure spending for AI and robotics rises. (2) Short Interest: Currently at 3.2% of float, with low squeeze risk. (3) Near-Term Catalysts: An upcoming investor update on autonomous driving may be a 'sell-the-news' event.
View 10 Sources
- https://www.bloomberg.com/markets/stocks
- https://www.reuters.com/business/autos/tesla-capex-outlook-2026
- https://www.cnbc.com/quotes/TSLA
- https://www.nasdaq.com/market-activity/stocks/tsla/short-interest
- https://www.investing.com/equities/tesla-motors-technical-analysis
- https://www.gurufocus.com/stock/TSLA/analysis
- https://www.morganstanley.com/ideas/tesla-valuation-2026
- https://www.barrons.com/articles/tesla-stock-price-target-margins-5165432
- https://www.wsj.com/market-data/quotes/TSLA
- https://www.marketwatch.com/investing/stock/tsla