AI stocks fatigue and oil price surge

What happened: Oil prices surged in 2026 due to supply disruptions in the Strait of Hormuz, tightening global markets. Meanwhile, AI stocks, which had dominated headlines, began to show signs of fatigue, with some investors expressing concerns about potential recession risks from high oil prices. Notably, Anthropic, an AI company, reported a spike in its annual revenue run rate, indicating continued growth in the AI sector.

Market impact: The oil price surge affected AI stocks indirectly by fueling recession fears, which typically lead to a pullback in big capital investments. This caused a shift in market sentiment, with investors turning to alternative sectors like small-cap stocks that are less exposed to economic downturns. Specifically, a small-cap stock gained 215% year-to-date, outperforming AI stocks. Anthropic's growth, however, boosted AI chipmakers like Nvidia and Google's TPUs.

What to watch next: Investors should closely monitor the upcoming earnings reports from Nvidia (scheduled for late Q2) and Google (early Q3) to gauge the impact of Anthropic's growth on their businesses. Additionally, keep an eye on global oil price movements and geopolitical developments in Iran, as they could further influence market sentiment towards AI stocks.