TRUMPING THE COMPETITION
05/31/26 Prospero.ai Investing - 323rd Edition (Weekend)
Hey Prospero Family, hope you read last week’s article on Memory stocks. One of our examples of an undervalued memory stock was MU (micron). Last week it ran +27%!!! Not so undervalued anymore. But if you caught that upside let us know!
Now let’s jump into today’s topic. Last week, there was a really good question that was brought to our attention on our livestream: “If President Trump has personally moved a handful of stocks dramatically just by talking about them. Is it possible to figure out what’s next?” In this article, we’re going to take a shot at potential sectors and companies that can benefit from future U.S. governmental focus. After each section, we’re going to give you 3 strongest players plus 3 “off the radar, dark horse” stock picks that currently look good in our signals. Before we give you our top picks, it’s important to understand the what and why of the livestream question.
WHAT’S going on? On April 30, President Trump posted on Truth Social that “Intel Stock continues to rise,” and shares popped roughly 3% in after-hours trading on the comment alone. That’s on top of a much bigger story; the U.S. government took a 9.9% stake in Intel back in August 2025 for $8.9 billion, a position the White House said had swelled past $50 billion by May. Intel has run up enormously this year on the back of that government backing and the America First chip-manufacturing push. Then came Dell. On December 2, 2025, Michael and Susan Dell pledged $6.25 billion to fund “Trump Accounts,” the federal child wealth-building program launching July 4, 2026. Five months later, at a Mother’s Day White House event on May 8, Trump thanked the family by name and told Americans to go buy a Dell. The stock hit an all-time high, jumping double digits on the day. Here’s an important caveat: Dell’s blowout earnings shortly after, with record revenue and a massive AI server backlog, added fuel to Trump’s shoutout. Micron got a “It’s a great company” nod at a Trump rally, while Palantir bounced after a Truth Social post mentioning its “war-fighting capabilities.” So the livestream question is fair: can you front-run the next shout-out?
One smart caveat, there’s a difference between when a company’s fundamentals are already strong before the President says a word, and a stock thesis that rests on sentiment alone. On the other hand, buying a company that sits squarely in the middle of a written-down policy priority, along with strong fundamentals AND one that might get a Trump shout-out is just smart investing. We’re looking at the latter.
WHY is Trump focusing on these particular companies? One thing we try very hard to do at Proserpo.ai is stay politically neutral. Our primary goal is to help you make money and become a better investor. Period. With that in mind, could there be some cronyism behind these moves? Possibly. But the fact remains that there are real policy driven, strategic reasons behind these moves. Here’s the main one. If relations between the U.S and China (or India) ever deteriorated or God forbid we entered into a conflict, the U.S. would be in a lot of trouble. Why? Because much of the materials we rely on a daily basis to drive our economy and our very lives are manufactured in China and/or India. Love him or hate him, crony kickbacks or not, the reality is that if the worst case scenario ever happened, we would be in quite a bind. Because of this reality, below are the 4 main industries (in addition to semi/chips) that are being targeted by the Trump administration to bring critical manufacturing back to America:
1. Pharmaceuticals and API’s
2. Critical Minerals, rare earths and magnets
3. Ship building and naval Infrastructure
4. Steel, aluminum and copper
Let’s take a look at each…
1. Pharmaceuticals and active ingredients (APIs)
An API (active pharmaceutical ingredient) is the actual chemical compound in a drug that does the medical work. In a Tylenol tablet, acetaminophen is the API; the rest is just packaging. The reality is that the U.S. imports most of its APIs from China and India. For example, a 2024 study by Johns Hopkins found that between 2020 and 2024, roughly 70% of all antibiotic “API’s” are manufactured in China. The Trump Administration’s goal is to lower the U.S. dependence on China because during a conflict or a supply shock, Chinese control over our antibiotic APIs becomes a national-security problem, not just a business one. That dependence is why the government is building a six-month Strategic Active Pharmaceutical Ingredients Reserve. Here are the companies who stand to benefit.
Top Pick: Eli Lilly (LLY) — already announced a $27 billion push to expand domestic API and sterile-injectable manufacturing.
Dark Horse Pick: Teva Pharmaceuticals (TEVA) – This company has been highly involved in the conversation, looks strongest of all the companies we’ve looked at, and has thus far been under the radar.
2. Critical minerals, rare earths, and magnets
Rare earth minerals are critical to so many things we take for granted. Cell phones, computer chips and battery manufacturing; not to mention any weaponry that is the backbone of our national defense. China doesn’t control our mining so much as the processing and magnet-making that we all depend on. It’s a named priority, and Washington has been writing big checks.
Who benefits:
Top Pick: MP Materials (MP) Is currently established as the at-scale, primary U.S. rare earth producer.
Dark Horse Pick: Energy Fuels (UUUU) Energy Fuels is a longer term play, but currently looks the strongest in our signals.
3. Shipbuilding and the naval-industrial base
Rebuilding U.S. naval shipbuilding capacity is a recognized national-security gap, and it’s one of the harder things for a competitor to replicate quickly.
Who benefits:
Top Pick: General Dynamics (GD) — submarines and naval vessels through its Electric Boat division.
Dark Horse Pick: BWX Technologies (BWXT) – specialized nuclear technologies service provider. Think submarines. Looks fairly good in our long and short term signals. Has crossover in the energy sector.
4. Steel, Aluminum, and Copper.
Over the last 50-60 years, the U.S. has sent its critical metal manufacturing overseas. That leaves our country vulnerable in a conflict. The Trump Admin’s policies is to bring these critical metals manufacturing back home.
Who benefits:
Top Pick: Nucor (NUE) — the largest U.S. steelmaker and a direct tariff beneficiary.
Dark Horse Pick: Cleveland Cliffs CFE –pure play steel producer that will benefit strongly from demand for US made industrial materials. Looks solid in our long and short term signals.
The bottom line
The “buy what the President might tweet about” game is seductive, and the recent track record is hard to ignore. But the durable edge isn’t guessing the next shout-out — it’s owning companies that sit inside policy priorities the administration has committed to in writing, through tariffs and government stakes that don’t disappear when the news cycle moves on. Re-shoring is also slower and messier than the headlines suggest. Surveys show the vast majority of executives plan to bring supply chains home, but only a tiny fraction have actually finished doing it. Factories take years to build. So treat these not as Prospero “buy” signals, but more as a multi-year long term holds.
A WORD FROM OUR CEO
We had a great week and really nailed a few longs, especially HOOD and IBM. ASTS continued its great run as well, and we were able to stay balanced with our hedges to maintain a safer portfolio. We are currently 58% above the market on an annualized basis, with a 57% win rate against SPY benchmarks.
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TRUMPING THE COMPETITION
Market/Macro Update w/ Cap/ Value Analysis
QQQ and SPY Net Options Sentiment
Sector Analysis
How we view the Sector performance and momentum
Portfolio Strategy
Putting it all together to make a portfolio that first controls for risks but also has upside
Longs
Adds —> Keeps —> Drops
Shorts
Adds —> Keeps —> Drops
Portfolio Summary
CAP / VALUE ANALYSIS
As we close out the month, the data tells a very clear story: Growth was the undisputed king of May. Looking at the 1-month window, we saw massive, broad-based rallies across the entire growth spectrum, with Small Cap and Large Cap Growth both posting massive gains of over 8.5% and 8.3% respectively. Value, on the other hand, lagged significantly, with Mid Cap Value barely squeezing out a modest 1.4% gain for the month.
Zooming into this week’s action, the momentum remained firmly in the Growth column, but leadership shifted slightly down the market cap ladder. Mid Cap and Small Cap Growth took the reins, posting strong gains of 2.6% and 2.4%, slightly edging out Large Cap Growth’s 2.3% increase. Meanwhile, the value sectors essentially flatlined across the board for the week.
The main takeaway as we exit May? Capital is still aggressively chasing growth, but investors are increasingly willing to look beyond just the mega-caps to find higher-beta opportunities in the mid and small-cap spaces.
QQQ Net Options Sentiment remains remarkably strong, but we are seeing the biggest drop we've had in a month as it recently fell under the 50 mark. However, looking at the close of the week, luckily that dip we had in NOS didn't last and we went right back into the 50s just before the market continued its strong move to end the week. As long as sentiment stays safely elevated and recovers quickly from these minor breaches, we remain highly confident in the underlying strength of this tech rally.
SPY Net Options Sentiment never saw 0 this week and popped up to the neutral zone with a big jump Thursday morning along with great price action for SPY to close the week. However, the week ended with a drop in NOS, and that nice run we saw Thursday flattened out to end the week. We are monitoring this consolidation closely to see if the broader market can build a more sustainable floor here.
SECTOR ANALYSIS
Looking at the 1-week data, we saw a massive, undeniable divergence on the board: wow, Tech. While other sectors completely stalled out or faced brutal corrections—with Utilities, Energy, and Consumer Defensive all sliding deep into the red—Technology decoupled entirely from the pack. Driven by an explosive 6% surge on the week, tech single-handedly carried the market’s momentum.
This brings its 1-month gains to a staggering 20%, proving that despite any broader market consolidation or mega-cap exhaustion, the structural appetite for technology remains completely unmatched. Capital isn’t just trickling into tech; it is aggressively flooding the sector, leaving almost every other area of the market in its dust.
PORTFOLIO STRATEGY
QQQ Net Options Sentiment remains heavily bullish, and SPY has shown more life. The Geopolitical environment seems to be calming so we will continue to take advantage of this while we can, while maintaining our safety net with some balance. We are still skewed bullish with 7 longs and 5 shorts.
Long / Bull Moves – SNDK Add/ MSFT, IBM, HOOD, FSLR, RGLD, ASTS Holds / VSH Drop
Adds
SNDK was added as it’s Growth+Profitability, Tech Flow and AI scores are incredible.
Holds
We’re sticking with most of our longs again as they continue to perform. MSFT finally made a nice move up and Net Ops and Tech flow remain strong, ASTS with great upside and Net Ops, IBM and HOOD both have great Tech Flow and high Net Ops. FSLR ranked highly with the AI and is showing strong Net Ops and RGLD continues to rank highly in our screener with high Upside and Net Ops while giving exposure to non Tech.
Drops
VSH was dropped as it ranked poorly in our screener overall.
Short / Bear Moves – PII, UBER, ADSK Add / BLD, DOX Hold / SBUX, RCL Drops
Adds
PII was added for its low Momentum and Net Ops scores, UBER was added for its poor Tech Flow, ADSK was added for its poor AI score and low Net Ops.
Holds
BLD was held for its high downside and zero Net Ops score. DOX was held for its poor Momentum Score.
Drops
SBUX and RCL scored poorly in our screener and were filtered out for having higher Tech scores.
Portfolio Summary
Long / Bull Moves – SNDK Add / MSFT, RGLD, ASTS, FSLR, IBM, HOOD as holds / VSH drop
Short / Bear Moves – PII, UBER, ADSK Adds / BLD, DOX holds / SBUX, RCL as drops
7 Longs: MSFT, RGLD, ASTS, FSLR, IBM, SNDK, HOOD
5 Shorts: PII, UBER, ADSK, BLD, DOX
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