AI growth stock performance in May

What happened: In May, AI stocks surged, led by Oracle (up 39.9%), Innodata (up 149%), ServiceNow (up 41%), and Navitas (up 61%). Oracle and ServiceNow's gains were driven by AI-related product launches and positive analyst coverage. Innodata and Navitas benefited from AI-related contracts and growing optimism. Nebius Group (NASDAQ: NBIS) also rose double digits, bucking the April tech sell-off.

Market impact: The AI sector saw significant inflows, with investors rotating back into tech stocks. Companies with strong AI offerings or exposure, like Oracle, ServiceNow, and Navitas, saw substantial gains. Smaller-cap AI pure-plays like Innodata also attracted attention, highlighting investors' appetite for growth in the AI space.

What to watch next: Oracle reports Q4 earnings on June 15, which could provide insight into its AI revenue growth. ServiceNow's Q2 earnings on June 23 will offer updates on its Control Tower product's performance. Additionally, investors should monitor AI-related contracts and partnerships, as these could drive further momentum in the sector.