Nuclear energy is a $2 trillion industry waiting to explode. And while some of the bigger-name providers of it have seen their share prices rise manyfold over the last year, other companies that provide nuclear power have remained under the radar – and undervalued.

That includes this month’s new addition. It’s a California utility company that’s one of the largest electricity providers in the country – and it has a nuclear plant that’s starting to get into the (you guessed it) artificial intelligence game.

Details inside.

Today we’re taking a half-sized position in an emerging MedTech company disrupting the insulin market. It has developed a fully automated device that removes many of the headaches associated with insulin pumps, which have kept adoption of those systems in check.

It’s a rapid-growth company with one product already approved by the FDA, and more solutions in the pipeline.

All the details are inside the November Issue of Cabot Small-Cap Confidential.

The market’s momentum continued last week as a benign inflation print and another round of solid earnings backed up bullish sentiment—with virtually all of the major indexes moving higher. For the week the S&P 500 rose 0.7%, the Dow Jones Industrial Average advanced 0.8%, the Nasdaq Composite jumped 2.2%, but the Russell 2000 slipped 1.4%.

The big-cap indexes have been leading for a while now, but more recently, we’ve seen an even greater dichotomy out there, with the broad market actually coming under pressure and with most (non-big-cap) indexes testing or breaking intermediate-term support. On the flip side, the number of growth-y stocks in good shape has actually increased. As we wrote last Friday, these sorts of divergences tell us the risk of some unpleasantness has increased, though that doesn’t guarantee it will happen and, if it does, when. Thus, it’s best to go with the flow right here—aiming to buy strong, fresh leaders at decent entry points, but also being willing to book partial profits on the way up and raise stops when needed. We’ll again leave our Market Monitor at a level 7.

This week’s list has a major growth tilt, which goes along with the emergence of many growth stocks from multi-week (or, sometimes, multi-month) consolidations. Our Top Pick is getting going from a two-and-a-half-month rest following another great quarterly report.

The major indexes continue to hover near all-time highs, even as more issues beneath the surface crop up. Another strong earnings season, dwindling U.S.-China trade tensions, and another interest rate cut are helping prop stocks up, even as volatility begins to creep higher again. So today, to account for a possible pullback, we opt for a stock that’s a household name but one that has become so undervalued that Clif Droke just added it to his Cabot Turnaround Letter portfolio.

Details inside.

The market’s momentum continued last week as a benign inflation print and another round of solid earnings backed up bullish sentiment—with virtually all of the major indexes moving higher. For the week the S&P 500 rose 0.7%, the Dow Jones Industrial Average advanced 0.8%, the Nasdaq Composite jumped 2.2%, but the Russell 2000 slipped 1.4%.

The market’s momentum continued last week as a benign inflation print and another round of solid earnings backed up bullish sentiment—with virtually all of the major indexes moving higher. For the week the S&P 500 rose 0.7%, the Dow Jones Industrial Average advanced 0.8%, the Nasdaq Composite jumped 2.2%, but the Russell 2000 slipped 1.4%.

We’re seeing lots of crosscurrents in the market right now, especially when it comes to the evidence -- the big-cap indexes are in good shape and we’ve seen a few more breakouts from growth stocks ... but the broad market is very iffy and most other indexes are stuck in the mud. We think it’s best to go with the flow--ditching stocks that break down but selectively adding stronger, fresher names, all while holding some cash for future buying power (if more breakouts come during earnings season) and for cushion (if the market weakens again). We’ve had a few changes in the past two weeks (including some in our special bulletin today), and we go over all the details in tonight’s issue.

Cannabis investors have turned into bored apes.

After President Donald Trump said on August 11 he’d get around to cannabis reform “in a few weeks,” cannabis speculators concluded making money was as simple as pulling out a calendar, counting forward three weeks, and buying ahead of the expected big pop on that date – which was in early September.

It goes without saying that a big part of being a turnaround investor is having a contrarian bent. Let’s face it, we’re a hardy bunch who typically shun the crowd and buy what are, in most cases, stocks that are completely out of vogue with the typical market participant.

Stocks made yet another new high this week.

The S&P 500 has returned 17% this year and is well on its way to another 20%-plus return year, making it three consecutive years of such returns for the first time in nearly 30 years. Sure, the market likes rate cuts, but artificial intelligence is the main force driving the market higher.

Technology stocks, which now comprise more than a third of the S&P index, have driven the market higher for most of this three-year-old bull market. While AI is the primary driver of the market, it isn’t about just technology stocks anymore. The AI catalyst is driving other sectors higher.

AI is transforming the utility sector. The best stocks now offer strong growth in addition to defense. After being stagnant for decades, electricity demand is exploding. AI requires enormous amounts of electricity for the data centers that house the computer components. Electric vehicle proliferation and rapidly growing onshoring of manufacturing are also juicing demand.

In this issue, I highlight one of the best utility stocks on the market. This unprecedented environment is transforming the market’s most defensive sector into one that also offers exciting growth. The combination of defense and growth is unbeatable.

Despite some mid-week wobbles for stocks, especially in the growth sector, the market once again closed the week at new highs as the S&P 500 gained 1.9%, the Dow rallied 2.2% and the Nasdaq advanced by 2.3%.

In view of the alarming number of news headlines that point to a weakening economy (at least in some quarters of it), it may seem surprising that the normally defensive consumer staple stocks are underperforming.

Normally, the staples are viewed by investors as something of a safe haven during periods of economic uncertainty, providing as they do essential goods like food and household products that are purchased even in tough times. But the present environment is proving to be an exception to that rule of thumb.

WHAT TO DO NOW: Our Cabot Tides are now on the fence while our Two-Second Indicator is negative as the market is in the middle of another test of the uptrend. Meanwhile, growth stocks have bent but not too many have truly broken, and there are still a good number setups out there. We sold Arista (ANET) on a special bulletin this morning, leaving us with around 45% in cash; we’ll hold onto that tonight as we want to see how this pullback plays out. Details below.

After beautifully navigating the historically troubling months of September and October, stocks are off to a dicey start this month. While the S&P managed to close slightly higher on Monday, most stocks had a rotten day. The index was propelled by technology while 400 of the 500 stocks moved lower on the day. On Tuesday, technology sold off and almost all sectors were lower. Is this a hiccup or a harbinger?

The S&P 500 started the week on another up note. But the index return is deceiving.

The S&P is being pulled higher by a handful of technology stocks. But 400 of the 500 stocks and nine of the 11 sectors were lower on Monday at midday. The earnings season so far has reaffirmed a positive outlook for artificial intelligence investments. That helps drive the index higher as technology stocks represent more than a third.

It’s not always that the market outperforms in October, but this year’s “jinx month” came and went on a positive note (albeit with a minor setback earlier in the month).


Granted, there was some volatility on the political front, but as far as the equity market was concerned, it wasn’t too bad. The S&P 500 index stood at a record high as recently as Wednesday, and Wall Street’s favorite stocks and ETFs are mainly trending higher as we exit the month.

The Russell 2000 and S&P 600 SmallCap Index have pulled back from recent highs, but the data suggests they’ll go higher in the weeks ahead.

Bank of America’s seasonality analysis shows November tends to be a strong month for the market. The Russell 2000 is up 70% of the time, with an average gain of 2.64%. Small-cap industrials tend to be particularly strong, up by 6.1% on average, and rising 79% of the time.

As expected, the Federal Reserve cut interest rates by a quarter point yesterday. This was largely already baked into the market. Looking ahead, Fed Chairman Jerome Powell had an impactful comment: “What do you do if you are driving in the fog? You slow down.”

This comment is consistent with our strategy of alternating aggressive and conservative stocks, taking partial profits to build cash, and seeking international diversification.

This Halloween, there’s nothing to fear. At least not for investors.

OK, nothing is a bit of an exaggeration. Today’s anticipated meetup between President Trump and Chinese President Xi Jinping could go sideways, putting high tariffs between the two mega-powers back on the menu. There could be some key earnings blowups ahead as we remain in the thick of third-quarter reporting season. And the government shutdown is more than a month old at this point, which could take a toll on the market.

The market just keeps on going. So far this week, the S&P 500 has hit a new high on both Monday and Tuesday.

The S&P 500 is now up about 17% year to date with more than two months left in 2025. There is a good chance that the index delivers another 20%-plus return year, which would make it three consecutive years of such returns for the first time in nearly 30 years. Sure, we’re in a Fed rate-cutting cycle. Investors love that. But artificial intelligence is the main force driving the market higher.

One of the most attractive industries right now for turnaround-focused investors is chemicals, with the share prices for many major producers in this group hovering at or near multi-year lows.

The reasons for this collective underperformance vary, and while not all chemical companies are in a classic turnaround situation, many of them are under serious margin pressures and are implementing strategic plans aimed at improving their company’s fortunes and reversing the stock price declines.

WHAT TO DO NOW: The market continues to hang in there, but growth stocks have been far trickier, with many pulling back sharply, others testing support and a few breaking down. Still, it’s mostly mixed, with some names perking up, so we’re staying flexible, especially as earnings season plows ahead. This week we sold two names that cracked—MP Materials (MP) and GE Vernova (GEV)—which leaves us with 43% in cash. We’ll stand pat tonight, though we could redeploy some of the money into stronger names if growth stocks continue to stabilize.

There’s been a jump in volatility among individual stocks and some sectors (gold, oil, retail investor favorites, etc.), but at an index level, things continue to be pretty smooth. The S&P 600 SmallCap Index is trading higher than it was a week ago.

Karman Holding (KRMN) got whacked this morning after reporting a mixed quarter but has climbed back somewhat through the early afternoon. We’re standing by it, for now.

Warrior Met Coal (HCC), Primo Brands (PRMB) and Millicom (TIGO) Report

It’s required patience to live with the ups and downs of owning Enovix (ENVX) for as long as we have. And the timeline here serves as another reminder that building a company to bring a new product to market is no small feat. In this case, the launch of high-volume sales keeps getting pushed out, which also pushes out performance of the stock. But we’re sticking with ENVX because those better days should still arrive. And when they do, I think the stock can capture investors’ imagination and push it to levels that will seem, at times, totally ridiculous. We have seen that time and time again with these types of stocks.

WHAT TO DO NOW: While the market is in decent shape, our indicators are worsening, the broad market is weak and growth stocks remain very tricky—many look fine, but volatility is insane and, this week, we’ve seen more than a few air pockets after earnings. We’re still taking things on a stock-by-stock basis, which today means cutting bait on Arista Networks (ANET), which looks toppy after a poor earnings reaction. We’ll sell and hold the cash, which will be around 45% of the portfolio.

Hello from Senegal! While there is no regular Cabot Explorer issue this week as I am halfway around the world, I do have two new Sell alerts today.

Our Cabot Top Ten Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Top Ten features.