Investors ended June on an uneasy note as concerns over the sustainability of the artificial intelligence boom, elevated interest rates and fears of rising inflation sparked sharp swings across US equities.

But while the recent pullback dented sentiment, several strategists believe July could mark the beginning of a fresh leg higher for stocks, supported by strong seasonal trends, robust corporate earnings, delayed AI listings and renewed investment flows.

The benchmark S&P 500 has still gained more than 8% so far this year, while the technology-heavy Nasdaq Composite has advanced about 11%, extending a bull market that has lasted more than three years.

Despite the recent turbulence, analysts say the backdrop entering July appears considerably more supportive.

Wells Fargo bets on a strong July rally

Wells Fargo is among the most optimistic voices heading into the new month, arguing that July has historically been one of the strongest periods for US equities and that several additional catalysts could reinforce that pattern this year.

In a strategy note led by Ohsung Kwon, the bank described a “strong summer rally ahead,” pointing to seasonality, improving investor positioning, expected earnings growth, fresh inflows from so-called Trump accounts and delays to major artificial intelligence-related public offerings.

The bank expects investor sentiment to reset after June’s volatility, which it largely attributes to quarter-end portfolio rebalancing.

It also expects uncertainty surrounding the US midterm elections later this year to become a bigger market factor only in September.

According to Wells Fargo, the first half of July has produced the strongest seasonal performance of any comparable period over the past century, with the S&P 500 delivering an average return of 1.35%.

The bank also noted that its proprietary investor sentiment indicator has returned to neutral territory after triggering a sell signal in May.

Quantitative investment funds, which suffered losses during the final week of June, are also entering July with far more neutral positioning than before the recent selloff, potentially creating room for renewed buying.

Reflecting its optimism, Wells Fargo raised its year-end target for the S&P 500 to 7,950 from 7,300 two weeks ago.

Recent pullback driven by AI spending concerns

Much of June’s weakness centred on the technology sector, particularly the so-called Magnificent Seven stocks that have powered markets higher over the past two years.

Matthew Timpane, senior market strategist at Schaeffer’s Research, said the broader market had remained relatively resilient despite pressure on the largest technology companies.

“I think June has held up relatively well despite pressure from the Magnificent 7, especially as both the dollar and yields moved higher this month,” he said.

Timpane noted that the US dollar had broken out of a year-long trading range before retreating from its May 2025 highs, while Treasury yields also remained elevated.

According to Schaeffer’s data, the Roundhill Magnificent Seven ETF has declined roughly 12.7% over the past month.

“Traders and investors do not appear to be in love with the large hyperscalers right now, as they continue to spend aggressively on AI capex. In some cases, these companies are even willing to issue debt and equity in size to continue the AI buildout,” Timpane said.

Even so, historical trends suggest the weakness may not persist.

Schaeffer’s analysis shows July has generated positive returns 80% of the time over the past two decades, with average gains of 2.67%.

Over the last 10 years, July has delivered positive returns every year, averaging gains of 3.51%.

Timpane said investors should continue monitoring the US dollar and Treasury yields closely.

“If July’s bullish seasonality is going to play out, we want to see the dollar remain contained. Likewise, we want to see rates fall,” he said.

AI IPO delays could extend the technology cycle

One of the more surprising bullish arguments comes from the delayed public listings of several high-profile AI companies.

Recent reports suggesting that OpenAI and Anthropic may postpone their public market debuts have weighed on sentiment across the technology sector, with investors initially viewing the delays as a sign of weakening market conditions.

Wells Fargo, however, argues the opposite.

The bank believes postponing these listings reduces new equity supply, providing support for existing technology shares.

It also argues that delayed IPOs could have a second-order benefit for the broader AI ecosystem.

According to Wells Fargo, companies preparing for public listings had been under pressure to improve profitability by raising token prices charged to enterprise customers using their AI models.

If IPOs are delayed, that pressure could ease, allowing token prices to remain lower.

Lower pricing could stimulate demand for computing power, ultimately extending the AI investment cycle rather than shortening it.

“Buy the AI dip: IPO delays are bullish,” Wells Fargo said.

Earnings and fund flows could provide additional support

Analysts also expect corporate earnings to provide another catalyst for equities during July.

Wells Fargo projects second-quarter earnings per share growth of 22% year over year, accelerating from the 19% growth recorded during the first quarter.

The bank expects part of that improvement to come from tariff refunds issued to companies.

It estimates approximately $36 billion has already been distributed, with another $90 billion potentially still to come.

Consumer staples and industrial companies are expected to be among the biggest beneficiaries, with many businesses indicating that potential refunds have not yet been incorporated into earnings guidance, leaving room for upside surprises.

Fresh investment flows may also support markets.

Wells Fargo estimates newly created “Trump accounts” for qualifying children could generate roughly $20 billion of price-insensitive buying concentrated in large-cap US equities.

Although the amount represents only a small fraction of annual retirement account inflows, the bank argues these accounts could have an outsized impact because they are expected to invest primarily in US stocks rather than diversified portfolios.

After a volatile finish to June, analysts believe these combined forces could help shift investor attention away from recent concerns over AI spending and toward the stronger seasonal backdrop that has historically favoured US equities in July.

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AeroVironment stock price surged in the extended hours, paring back some of the recent losses, after the company announced strong financial results amid the ongoing demand for drones. AVAV shares jumped by over 20%, its best daily performance this year. It reached a high of $168 from the year-to-date low of $135. 

AeroVironment stock jumps after earnings

AVAV, a smaller player in the defense industrial complex, published results and guidance that were relatively better than expected. This growth was driven by the ongoing demand for drones, which have become essential in modern warfare. It is also benefiting from the rising demand for counterdrones and more space technologies.

Its fourth-quarter revenue jumped by 30% to $641 million, bringing the annual figure to $1.98 billion. Its EBITDA and its margin jumped to 22%, while the amount of backlog jumped to over $1.2 billion. This means that it has a book-to-bill ratio of 1.4.

Most importantly, the company boosted its forward guidance and now expects that its revenue will be between $2.13 billion and $2.23 billion. The upper side of the guidance was higher than the estimated $2.17 billion.

AeroVironment is set to benefit from the recent demand for drones, with the US Department of Defense budgeting to spend over $75 billion in the next financial year. 

Officials have been surprised by the success that companies like Iran and Ukraine have achieved in the battlefield. Iran has been able to destroy US equipment worth billions of dollars using drones that cost less than $50,000 to make.

READ MORE: Cramer: AeroVironment is drone name ‘the US government favours’

Most recently, Ukraine has caused havoc in Russia, where it has targeted tens of locations, including refineries and factories. In a statement, the CEO said:

“Not only the U.S. Department of War, but all of our allies are behind the eight ball in terms of adoption and deployment. Now we’re playing catch-up. Our military is playing catch-up in a very fast pace.”

AeroVironment’s main challenge is that the industry is becoming highly competitive as companies seek to take advantage of this theme. Anduril has already achieved a $61 billion valuation by focusing on these drones. Other companies seeking to gain market share in the industry are Shield AI, Neros Technologies, and Firestorm Labs. In March, Shield AI raised $240 million at a $5.3 billion valuation.

Another key challenge for AeroVironment is that its business has become relatively overvalued, with its forward price-to-earnings ratio rising to 48.

AVAV stock price analysis

AeroVironment stock chart | Source: TradingView

The weekly chart shows that the AVAV share price has remained in a bear market in the past few months. This is in line with what we predicted. It has dropped from a record high of $418 last year to a low of $139. It then rebounded in the extended hours, reaching a high of $167. 

The stock remains below the 61.8% Fibonacci Retracement level. It has also dropped below all moving averages. This rebound happened after the stock retested the key support level that connected the lowest swings since January 2022.

Therefore, the stock will likely continue rising, potentially to the key resistance at $250. A break below the ascending trendline will invalidate the bullish outlook and point to more gains.

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The UnitedHealth Group stock price has embarked on a major rally in the past few months and has recently formed the encouraging golden cross pattern. UNH jumped to $420, its highest level since April 25. It has soared by 78% from its lowest level this year. 

Why UnitedHealth Group stock is soaring

UnitedHealth Group, the biggest health insurance company in the United States, is doing well this year. This is a sharp contrast to what happened last year when it became one of the top laggards in Wall Street. 

The stock has rebounded even after Warren Buffett’s Berkshire Hathaway sold all the shares in the first quarter. This rally is mostly because of a change of policy by the Trump administration.

In April, the US administration said that it would boost payments to Medicare Advantage plans next year. It will boost the payments by 2.48% to $13 billion, higher than the 0.09% that the CMS had proposed earlier this year. In a note at the time, a Morningstar analyst said:

“Final rates typically rise from initial rate notices, and we think investors appreciated that pattern remaining intact, despite the ongoing regulatory pressure on this end market.”

In addition to the UNH stock, other similar companies are doing well. CVS Health jumped to $103 on Monday, up sharply from last year’s low of $43.55. While CVS is known for its pharmacies, it is also a big name in the health insurance industry. Humana shares have soared by 135% from its lowest point this year.

UnitedHealth hiked its revenue estimates

The UNH stock price has also soared after the company published strong financial results. These numbers revealed that its revenue soared to $111.72 billion in the first quarter, higher than the expected $109.57. This revenue growth showed that the company was still seeing strong demand during the quarter, a move that will help the new management implement the turnaround.

Its earnings per share (EPS) rose $7.23 beating the analysts estimates of $6.57. Most notably, the company also boosted its forward estimates. It now expects that adjusted earnings will be $18.25 this year, while the annual revenue will soar to $439 billion. 

Analysts, on the other hand, predict that the revenue will jump to over $444 billion this year. These numbers explain why analysts are upbeat about its performance, with Bank of America hiking its target to $475 from the previous $450. Leetink Partners and Mizuho see the stock continuing rising.

UNH stock price technical analysis

UnitedHealth stock chart | Source: TradingView

The daily chart shows that the UnitedHealth Group stock has done well in the past few months. It has soared above the crucial resistance level of $381, the highest point in October last year. It was the neckline of the double-bottom-like pattern at $258. 

The stock has formed a golden cross pattern, which happens when the 50-day and 200-day moving averages cross each other. This pattern normally leads to more upside over time. 

The stock has also remained above the Ichimoku cloud indicator. Therefore, the path of the least resistance is upwards, with the next key target to watch being at $500. 

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Corning stock price continued its strong bull run, making it one of the best-performing companies on Wall Street. GLW jumped to a record high of $255.70, up by 190% this year, with its market capitalization rising to over $220 billion.

Corning has become a major player in the AI industry 

Corning, a top technology company, has been one of the most essential players in the booming artificial intelligence industry.

This transition has helped it move from the glass industry it is well-known for. It has announced major deals with companies like Meta Platforms, Nvidia, and Amazon.

Corning will offer fibre and connectivity products to Meta Platforms in a deal worth over $6 billion. It also entered major multi-billion-dollar deals with companies like NVIDIA and Amazon. Its partnership with Nvidia is expected to create over 3,000 jobs in the United States.

These developments are aligning with its Springboard growth strategy, citing demand from its AI infrastructure, which will push it s annual revenue run rate to over $20 billion in the long term.

Corning has become highly overvalued 

The main concern about Corning is that it has become highly overbought despite the ongoing demand for its products. Data shows that the forward price-to-earnings ratio rose to 69, much higher than the sector median of 23. Its multiple is also higher than the five-year average of 22.5. 

The forward EV-to-EBITDA multiple has jumped to 10.5, which is also higher than the sector median of 19.

These numbers are much higher than those of some of the fastest-growing companies in the US. For example, despite its strong revenue growth, Micron has a forward price-to-earnings ratio of just 15, while Nvidia has 22.

Analysts predict that Corning’s revenue growth will not be all that great in the coming years. For example, the average estimate among analysts is that revenue will jump by 15.4% this year to $18.8 billion, followed by $22.5 billion in the next financial year.

Therefore, these numbers mean that the company will need to report strong revenue and profitability growth in the coming quarters to justify the high valuation multiples.

Corning stock is facing technical challenges 

Technicals are also sending a red flag for the stock. As the chart shows, the stock has become highly overbought, with the Relative Strength Index (RSI) moving to 79, its highest point since February 23rd. 

It has also started to form a bearish divergence pattern, which happens when the stock’s price is rising, while the RSI has formed a descending channel.

The stock has also deviated substantially from the historical averages, with the 100-day Exponential Moving Average (EMA) being at $99, much lower than the current $255.

READ MORE: Corning surges to record high: is the AI boom just beginning?

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Wells Fargo has increased its price target on Advanced Micro Devices to $615 from $505 while maintaining its Overweight rating, reflecting growing confidence in the company’s long-term server CPU business and continued demand driven by artificial intelligence (AI).

AMD shares rose 2% on Tuesday’s trading after closing the previous session 3.4% higher at $539.49.

Wells Fargo raises revenue and earnings forecasts

Wells Fargo increased its revenue estimates for AMD’s server CPU business over the next three years.

The brokerage now projects server CPU revenue of $16.0 billion in 2026, rising to $20.5 billion in 2027 and $25.0 billion in 2028.

The firm left its data centre GPU revenue estimates unchanged at $15.6 billion for 2026, $40.6 billion for 2027 and $63.0 billion for 2028.

The brokerage also raised its earnings outlook, forecasting earnings per share of $7.15 in 2026, $13.40 in 2027 and $18.75 in 2028.

Wells Fargo based its new price target on a price-to-earnings multiple of 33 times its projected 2028 earnings.

AMD currently trades at a price-to-earnings ratio of 179.

AI demand continues to support the outlook

A Wells Fargo analyst team led by Aaron Rakers said the higher price target reflects expectations that demand for server central processing units will remain strong due to continued momentum in agentic AI.

The firm expects AMD’s server CPU revenue to increase 68% in 2026.

It also forecasts server CPU sales growth of between 22% and 28% during 2027 and 2028.

Based on Monday’s closing price, the revised target implies approximately 14% upside for the stock.

AMD highlights server CPU roadmap

AMD recently said production of its sixth-generation 2nm EPYC Venice server processors began ramping in late May, with volume production expected to continue through the second half of 2026.

The company said more customers are validating and ramping the Venice platform than any previous EPYC generation.

AMD also raised its estimate for the server CPU total addressable market to $120 billion by 2030 during the previous quarter.

The company added that its next-generation 2nm EPYC Verano processors are expected to launch in 2027, with a focus on delivering AI performance per dollar and per watt.

Recent AI-focused expansion

AMD also announced its acquisition of MEXT, a company specialising in AI-driven memory optimisation technology.

The acquisition is intended to strengthen AMD’s AI portfolio by improving performance and lowering the total cost of ownership for customers operating in cloud and enterprise environments where memory constraints are a challenge.

Separately, AMD participated in the Series B funding round for cloud computing startup TensorWave, which closed at a valuation of $1.55 billion.

The investment supports TensorWave’s plans to expand its infrastructure using AMD hardware and software and further strengthens AMD’s position in the data centre ecosystem.

Other analysts also turn more positive

Several brokerages have recently revised their outlook on AMD.

Cantor Fitzgerald raised its price target to $700 while maintaining an Overweight rating, citing continued momentum in the compute market.

UBS increased its target price to $670, pointing to gains in AMD’s server CPU market share.

Meanwhile, Wolfe Research reiterated its Outperform rating with a $450 price target, highlighting AMD’s progress in artificial intelligence and graphics processing units.

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