U.S. stock markets closed at record highs in May, supported by a solid first-quarter 2026 earnings season, continuation of artificial intelligence (AI) trade and expectations of a near-term solution to the Middle East geopolitical conflicts.

Last month, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 3%, 5% and 8%, respectively. On May 29, the last trading day of the month, the indexes posted record intraday and closing highs. 

Momentum Likely to Continue in June

AI trade is gathering steam as days progress. Ai infrastructure trade is now expanding from chips to memory and storage devices as well as servers and racks. Moreover, agentic AI is expanding the scope of AI infrastructure providers in the physical layer.

Massive AI data center growth is benefiting several nuclear power generator and reactor makers, construction giants, cooling and water purifying companies and industrial manufactures. 

On May 28, the U.S. government entered into a "memorandum of understanding" with Iran to extend the ceasefire for 60 days and continue negotiations on Iran's nuclear program. The negotiations also include the reopening the Strait of Hormuz with Iran removing their mines within 30 days and the United States gradually lifting the naval blockade. 

At this stage, we recommend five stocks with a favorable Zacks Rank that are expected to maintain their momentum in June, too. These are: Microchip Technology Inc. (MCHP Quick QuoteMCHP - Free Report) , Ross Stores Inc. (ROST Quick QuoteROST - Free Report) , MasTec Inc. (MTZ Quick QuoteMTZ - Free Report) , Arrow Electronics Inc. (ARW Quick QuoteARW - Free Report) and Littelfuse Inc. (LFUS Quick QuoteLFUS - Free Report) .

Each of the stocks sports a Zacks Rank #1 (Strong Buy) at present and has a Zacks Momentum Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks in the past three months.

Image Source: Zacks Investment Research

Microchip Technology Inc.

Microchip Technology benefits from growing AI investments. The company’s Gen 4 and Gen 5 data center products are witnessing strong sales growth. MCHP’s new products are expected to gain traction with the launch of the industry's first 3-nanometer-based PCIe Gen 6 switch that powers modern AI infrastructure. 

These switches offer double bandwidth, lower latency, advanced security and high-density AI connectivity for next-generation cloud and data center performance. The success of the restructuring plan also bodes well for MCHP’s prospects. The company also entered the PCIe retimer market in the June 2026 quarter as a companion device for Gen6 switches, and disclosed an OEM design win that displaced a competitor. 

MCHP has expanded connectivity, storage and compute offerings for AI and data center applications, as well as intelligent power modules for AI at the edge. These factors are expected to drive top-line growth in the long term.

Microchip Technology has an expected revenue and earnings growth rate of 31.5% and 84.2%, respectively, for the current year (ending March 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 17.5% in the last 30 days.

Ross Stores Inc.

Ross Stores has been benefiting from the strong execution of its off-price retail model. ROST continues to benefit from solid demand for value-driven merchandise, delivering 21% sales growth and 17% comps growth in first-quarter fiscal 2026, supported by effective merchandising and marketing initiatives. 

ROST is also progressing well on store-expansion plans, with long-term growth potential across both banners, targeting 2,900 Ross Dress for Less and 700 dd’s DISCOUNTS stores. For fiscal 2026, ROST expects comps growth of 6-7%, with earnings of $7.50-$7.74, up 13-17% year over year. 

Solid financial flexibility, disciplined capital allocation and ongoing share repurchases highlight ROST’s commitment to shareholder returns, underscoring a robust business for continued growth.

Ross Stores has an expected revenue and earnings growth rate of 8.2% and 15.6%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 3.9% over the last seven days. 

MasTec Inc.

MasTec is a major beneficiary of the AI-powered data center boom. Emerging demand tied to AI and data centers is becoming a meaningful growth driver. MTZ highlighted increasing demand for fiber connectivity, low-latency networks and power infrastructure to support data centers. 

MTZ is gaining traction in turnkey data center projects, leveraging its integrated capabilities across construction management, telecom, power and civil infrastructure. These projects require large-scale, multi-disciplinary execution, positioning MTZ to capture larger contract values and expand its addressable market over time.

MTZ is a leading solution provider for design, construction, and maintenance services in the wireless network space. High-speed wireless network connectivity is of utmost importance as both enterprises and households use more AI-driven products. 

MasTec has an expected revenue and earnings growth rate of 22% and 35.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 3.5% over the last 30 days. 

Arrow Electronics Inc.

Arrow Electronics benefits from continued operational momentum across Global Components and ECS, with Q1’26 consolidated sales of $9.47 billion, up 39% year over year and above guidance. 

ARW’s diverse customer portfolio of thousands of leading manufacturers and service providers, provides revenue stability and reduces concentration risk. Strong cash flow generation from its asset-light model supports share buybacks and strategic investments. For the second quarter of 2026, Arrow expects consolidated sales of $9.15 billion to $9.75 billion.

Arrow Electronics has an expected revenue and earnings growth rate of 15.6% and 63.1%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 32.2% over the last 30 days. 

Littelfuse Inc.

Littelfuse designs, manufactures, and sells electronic components, modules, and subassemblies. LFUS operates through three segments: Electronics, Transportation, and Industrial.

LFUS’ products are vital components in virtually every market that uses electrical energy, from consumer electronics to automobiles, commercial vehicles and industrial equipment. LFUS is also expanding into adjacent markets that complement their core business including power distribution centers for mining operations, generator controls and protection for marine applications, heavy-duty switches for commercial vehicles and electromechanical sensors used in the automotive industry.

Littelfuse has an expected revenue and earnings growth rate of 16.6% and 39.1%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 14.4% over the last 30 days.