Market backdrop and positioning
As the market recalibrated during the recent earnings period, the rally that began among U.S. technology names broadened into other regions and sectors. Investors rotated into industrials, electronics manufacturers, communications infrastructure and businesses tied to artificial intelligence demand across Asia and Europe. This shift pushed many ProPicks AI selections into significant positive territory during May.
ProPicks AI members who held the portfolios during this period saw sizable international gains. The AI engine’s monthly selection and rebalancing framework is now preparing its next refresh for June, giving current subscribers access to the May positions and their supporting rationales ahead of next month’s update.
Notable performers and geographic patterns
South Korea emerged as a leading source of upside among the AI-selected stocks. Several infrastructure and electronics companies there reported outsized monthly moves. Taiwan’s hardware and chipmakers also registered very strong performances, and European industrial and semiconductor-related names rallied materially as well. Communications, network infrastructure and cybersecurity companies outside the U.S. also participated in the broader advance.
The following list highlights several of the most prominent moves recorded in May among companies the AI models had selected:
- SK Networks - surged more than +105.62% in May and is up approximately +116.31% since its initial selection in April.
- LG CNS - climbed about +34.92% in May and roughly +47.39% since being selected, as investors favored cloud, enterprise AI and infrastructure exposure across Asia.
- MediaTek - advanced +63.41% in May and approaches nearly +191.13% since first being selected in April, benefiting from strengthening demand for AI-capable chips.
- E Ink - rose +70.91% amid heightened electronics and display manufacturing demand.
- Lenovo - jumped +67.55% in May and sits over +100.92% since initial selection in December, reflecting inflows into AI-linked hardware and infrastructure manufacturers.
- Freni Brembo (Italy) - climbed +50.51% in May as industrial and automotive suppliers gained momentum.
- Infineon (Germany) - rallied +34.31% in May and is up approximately +84.40% since selection earlier in the year.
- Megaport (Australia) - surged +64.43% in May amid accelerating network infrastructure spending.
- Yubico (Sweden) - advanced +47.49% on sustained demand for digital authentication and cybersecurity solutions.
Deep dive: SK Networks
One of the largest contributors to May’s international gains was SK Networks, a South Korean holding company that the models had added to the portfolios in April. At the time of selection, several data points stood out and later helped explain the sharp rally.
- Valuation and fundamentals - SK Networks had been trading at roughly half its book value even as operational momentum and investor sentiment within Asian infrastructure and technology segments improved.
- Strategic repositioning - the company had ramped up its AI focus, including a reported investment of approximately 97 billion KRW into an AI startup and the establishment of an AI lab in Silicon Valley, which signaled a pivot toward infrastructure and enterprise AI exposure.
- Analyst coverage - the average analyst target for the company sat around 33% above the then-current trading level, with the five covering analysts maintaining Strong Buy ratings.
- Income support - a dividend yield near 5% provided additional support to the investment case as capital rotated into infrastructure, cloud and enterprise AI businesses across Asia.
These attributes, as captured by the model’s selection criteria, were consistent with the outsized return observed during the month.
Deep dive: MediaTek
MediaTek was another major winner identified by the AI strategies. The stock’s ascent in May reflected a rebound from a prior pullback and a reassessment of the company’s exposure to AI-capable chip demand.
- Recent price action - the stock had previously declined about 23% over a one-month window despite signs of improving revenue trends tied to AI-chip demand.
- Analyst positioning - several major firms issued fresh Buy upgrades with targets ranging from approximately 2,000 to 2,400 TWD, while the share price was near 1,390 TWD at the time those targets were referenced.
- Revenue outlook - AI-chip revenue was projected to exceed $1 billion in 2026, supporting the company’s expanding role in AI infrastructure.
- Partnerships and market share - strengthened ties with major cloud and AI infrastructure partners were cited alongside gains in Android smartphone market share from competitors and expanded exposure into automotive and IoT hardware segments.
These combined elements formed the basis of the model’s conviction and helped explain MediaTek’s robust performance after its selection in April.
How the models capture and rotate opportunities - the ASE Industrial example
The ProPicks AI process is designed to identify high-conviction names by evaluating a broad set of quantitative and fundamental signals, then to rebalance monthly to maintain the most attractive risk/reward opportunities. An instructive case is Taiwan’s ASE Industrial, which the models added earlier in the year and later rotated out following a significant run.
Why the models positioned into ASE Industrial:
- Demand thesis - the company benefited from accelerating AI infrastructure demand, growth in semiconductor packaging and rising investment in high-performance computing across Asia.
- Entry point - shares were added near NT$224.50 before a subsequent rally.
- Performance - the position captured a rally exceeding +112.90% as institutional flows moved into semiconductor infrastructure and AI-linked manufacturing businesses.
Why the models later removed the holding:
- Valuation - after the rally, ASE Industrial traded near roughly 56x earnings and about 6x book value, reflecting significantly higher valuation multiples than when it was added.
- Momentum and fundamentals - short-term momentum cooled after a weekly pullback, and the company’s operating margins and return on assets remained relatively modest for the premium valuation being assigned, with operating margins near approximately 9% and return on assets around approximately 6%.
- Earnings and market caution - a recent Q1 2026 earnings miss and rising short interest added near-term caution despite continued revenue growth and a partnership supporting longer-term AI and high-performance computing exposure.
- Portfolio discipline - the models ultimately found stronger risk/reward opportunities elsewhere, rotating out to preserve downside protection and to reallocate capital where valuation, momentum and upside potential were more balanced.
The ASE Industrial example highlights the model’s discipline: capturing outsized rallies when they occur but rotating out as valuation becomes stretched or momentum fades, rather than remaining fully exposed solely on the basis of a positive long-term outlook.
Broader sector implications
The May rebound demonstrated how leadership can shift across sectors as AI infrastructure spending, semiconductor demand and industrial technology investment move between regions. The models have shown the capacity to track these shifts by adding exposure to hardware manufacturers, semiconductor supply-chain companies, communications infrastructure providers and cybersecurity businesses as momentum and valuation signals align.
This rotation affected multiple parts of the market:
- Semiconductors and hardware - Taiwanese and South Korean chipmakers and hardware manufacturers benefited from renewed investor interest in AI-capable components and infrastructure.
- Industrial suppliers and manufacturing - European industrial firms and automotive suppliers rallied alongside improving manufacturing activity and demand for industrial technology.
- Communications and cybersecurity - companies focused on network infrastructure and digital authentication saw strong inflows amid rising enterprise spending in these areas.
How the ProPicks AI engine operates
The AI system underlying ProPicks evaluates thousands of equities each month. It processes over 15 years of financial data across more than 150 quantitative models, blending historical metrics, valuation signals and forward-looking growth indicators. For each strategy, the engine typically identifies up to 20 high-conviction names based on projected medium-term upside potential.
Portfolio construction follows an equal-weighting methodology for transparency and consistent performance tracking. Each month the strategies are rebalanced: new opportunities are added, top performers may be retained, and positions that no longer meet the criteria are removed. The objective is to maintain exposure to companies that represent the best combination of momentum, valuation and business performance as determined by the models.
Practical access and membership notes
Investors already subscribed to the ProPicks AI strategies can access the full list of May selections and the models’ written rationales ahead of the June rebalance. The publication notes that the May AI-selected international gains were available to members for a subscription price described in the original materials as being under a stated monthly threshold. Prospective subscribers are offered paths to view the picks and rationale before the new list is published.
Performance context and historical winners
The AI engine has produced previous notable winners referenced among historical selections, including Super Micro Computer and AppLovin, with total gains attributed to those stocks in the past. These examples were cited to illustrate the system’s capability to identify high-upside opportunities across different market cycles.
Summary and outlook for the June rebalance
After a month in which AI-linked, semiconductor, infrastructure and industrial technology names posted substantial gains, the ProPicks AI models are preparing the next monthly rebalance for June. The framework aims to maintain disciplined exposure by balancing upside potential against valuation and momentum, adding names that meet the composite criteria and removing those where risk/reward has become less favorable. Subscribers can review the current May selections and the detailed rationales before the refresh is finalized.
Appendix - key quantitative highlights drawn from model outputs
- Several selections more than doubled or produced triple-digit percentage gains from their initial selection dates across April to May timeframes.
- Analyst targets and upgrades were flagged for some winners, including target ranges for an identified Taiwanese chipmaker and multiple Buy upgrades from major firms.
- Valuation discipline led to the rotation out of holdings that, after very large rallies, traded at substantially higher multiples relative to earnings and book value.