Published on 3 Apr 2024 on Zacks via Yahoo Finance

Wall Street Set to See a Broad-Based Rally in Q2: 5 Picks

U.S. stock markets have been witnessing an astonishing rally in the past 15 months. However, the major driver of this rally was globally booming artificial intelligence (AI), especially generative AI. Companies that have extensive applications of AI in their final products have become multi-baggers in the past 15 months. Stock prices of some of these companies have skyrocketed 200-300% during this period.

These highly overvalued stocks make a large section of financial researchers and analysts skeptical of investing, although the near-term business outlook of these entities remains solid. Their current overstretched valuation makes them less attractive to investors.

Market participants are shifting more toward cyclical sectors like industrials, financials, energy, materials and transportation, to name a few. Consequently, the Wall Street bull run has become more broad-based. This trend is likely to gather pace in the second quarter of 2024.