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This morning’s April Consumer Price Index (CPI) report showed the hottest annual inflation rate since May 2023. The headline rate rose to 3.8% from 3.3% in March, exceeding the 3.7% estimate.
Energy was the most visible contributor. Costs jumped almost 18% year over year, the steepest annual increase since September 2022. Gasoline rose 28.4%, while fuel oil increased 54.3%.
Higher prices were not limited to energy. Shelter costs rose 3.3% versus 3.0% in March, and food was up 2.3%. Airline fares increased 2.8% for the month, lifting the 12-month gain to 20.7%.
Core inflation, which excludes food and energy, rose to 2.8% year over year, up from 2.6% in March and above the 2.7% forecast.
The monthly core figure was particularly notable: core prices increased 0.4%, nearly double the 0.2% pace reported in both February and March. The report also cited that the broader concern is that an acceleration in core prices can indicate the energy shock is spreading beyond its initial impact.
The CPI release helps explain why last Friday’s University of Michigan Consumer Sentiment Survey recorded its lowest reading since the survey began in 1952.
The article also pointed to mounting pressure on households, noting that wages are not keeping pace, credit card balances are near record highs, and the monthly cost of living—gas, groceries, and rent—is climbing again.
Investor Louis Navellier said he does not expect price relief in crude oil or at the pump until October, when worldwide demand naturally declines. He added that a peace deal and the full reopening of the Strait of Hormuz would likely reduce energy prices, but that any drop back to pre-conflict levels would take time.
Rystad Energy chief economist Claudio Galimberti said the general rule is that it takes as long as the outage duration to return to normal. He noted that if an outage lasts two-and-a-half months, it would take another two-and-a-half months to normalize. The article also stated that oil back in the $60s is unlikely anytime soon.
Against the inflation backdrop, the article highlighted a strategy of “following the money.” It cited acceleration in capital expenditure (CapEx) plans discussed on earnings calls by Alphabet, Amazon, Meta Platforms, and Microsoft.
Analysts expected these four hyperscalers to spend about $670 billion on AI in 2026. After the reports, that estimate increased to $725 billion, with expectations that spending will accelerate further in subsequent years.
The article argued that AI infrastructure buildouts are driving demand for storage solutions, specifically NAND flash memory. It said training models, inference, and machine learning applications require large volumes of data stored quickly, reliably, and securely.
It also cited a supply-demand imbalance: demand for NAND is expected to grow more than 20% this year, while supply is projected to rise only 15% to 17%. The article described this as a tailwind for leading memory players.
As an example, SanDisk—described as a pure-play NAND provider spun off from Western Digital in early 2025—was reported to have risen more than 3,500% over the last 52 weeks. The article also stated that major new production capacity is unlikely to arrive before 2027, keeping supply elasticity constrained and potentially supporting elevated NAND pricing for longer than many investors expect.
The article also referenced a “tale of two markets” dynamic. It said the S&P 500 has climbed nearly 7% over the last month, but that excluding AI-related stocks, the index has not gained a full 1%. It further cited Jefferies data that AI companies generated over 80% of the S&P 500’s year-to-date returns, while stripping out the AI component left the benchmark up about 2%.
It added that during the current earnings season, some non-AI companies are showing more concerning results. As an example, it cited Whirlpool, which the article said confirmed “war in Iran” contributed to recession-level industry decline in the U.S., with consumer confidence collapsing in late February and March. It reported that U.S. appliance demand fell 7.4% in Q1, including a 10% decline in March alone, and that CEO Marc Bitzer compared the slowdown to conditions during the global financial crisis.
The article concluded that while parts of the market may face slower growth and rising inflation, companies powering the AI buildout could still be early in a multiyear run. It said both Louis Navellier and Luke Lango emphasized following the AI spending wave and highlighted “AI memory” and NAND-focused plays as potential beneficiaries.
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