The bulls made it nine straight winning weeks, though the holiday-shortened four-day stretch (markets were closed Monday for Memorial Day) required a burst of earnings firepower to keep the streak alive. Dell Technologies (DELL) and Snowflake (SNOW) both posted blowout results, sparking sympathy rallies across AI-adjacent tech names and giving software stocks in particular a much-needed shot in the arm — the IGV, which we own, broke decisively above its 200-day moving average for the first time this year on Friday.

It’s been a great couple of months for the market and growth stocks, but despite the big run, the vast majority of evidence points to nicely higher prices down the road for the market, and for early-ish stage growth stocks. Near-term, though, it’s hard not to think things have gotten a bit giddy--that’s no reason to sell, but we are picking our spots on the buy side. We still have one-third in cash, but tonight we’ll stand pat and look to put that to work as some better entry points could arise in the next week or two.

As spring turns into summer, cannabis investors will increasingly focus on Department of Justice (DOJ) and Drug Enforcement Administration (DEA) hearings to consider whether they will reschedule recreational-use cannabis.

I expect cannabis stocks will rise as the June 29 hearing launch gets closer, due to elevated expectations that the rescheduling of medical cannabis creates momentum that will follow through to rec-use cannabis.

I’ll admit to having a bias in favor of precious metals miners. As both an analyst and an investor, I’ve been heavily involved with gold and silver for some 30 years when both metals were widely ignored and trading at multi-decade lows.

I was buying physical gold near its low in the $200s-per-ounce range circa 1997, which later proved to be one of my first successful long-term “turnaround” investment successes. Since that time, I’ve been hooked on the metal as an investment vehicle, not only because of its currency hedging capabilities, but because I view the current phase of the long-wave economic cycle as being quite favorable for the price appreciation potential in gold and other metals.

Last week saw the first pothole among most indexes and leading growth stocks, but the reaction to that has been about as bullish as one could hope, with the market in general and leaders in particular rebounding nicely late last week, and again on Tuesday.

Last week saw the first pothole among most indexes and leading growth stocks, but the reaction to that has been about as bullish as one could hope, with the market in general and leaders in particular rebounding nicely late last week, followed by this morning’s gap up. Of course, things are a bit giddy near term, with some indexes and a lot of leaders sticking straight up in the air, but intermediate term, there remain many green lights. We’ll return our Market Monitor to a level 8, but we still favor entering most stocks on minor weakness as moving averages catch up.

This week’s list is mostly growth-oriented, though it’s not all AI. Indeed, our Top Pick is a medical outfit that looks to be re-emerging after a tough early-year correction. Start small and consider adding more on a decisive breakout.

Stocks are back at new highs, shaking off a relatively short period of malaise. It’s clear that the AI boom is counteracting all the bad news coming out of the Middle East, the Federal Reserve, and elsewhere. The bull market is alive and well, and shows no signs of slowing, sending several of our stocks to new all-time highs this week. Having had our foot on the growth pedal for most of the last couple months, however, today we add a more conservative dividend payer that’s trading at a deep discount. It’s a new recommendation from Tom Hutchinson to his Cabot Dividend Investor audience.

Details inside.

The AI trade is hot again. And it’s spreading.

Initially, it primarily benefited the technology creators, including semiconductor and infrastructure companies. But like any game-changing technology, the benefits spread to other companies.

The next phase of the AI trade is likely in companies that enable and service the technology. This new phase is already evident in the stronger performance of previously lackluster utilities as they accommodate the huge electricity demand increase from AI data centers. AI profits are spreading toward companies that service the equipment and massive data management needs of AI.

In this issue, I highlight a REIT that is experiencing massive demand growth servicing the equipment and records generated by the burgeoning technology. It is making an already reliable income-generating security a growth investment as well. The AI trade isn’t dead. It’s shifting. And this security is in the new sweet spot.

As a reminder, this Week in Review is focused on our existing positions as I took the holiday weekend to spend some extra time with the family. Here’s what’s happening with all our trades.

As a reminder, this Week in Review is focused on our existing positions as I took the holiday weekend to spend some extra time with the family. Here’s what’s happening with all our trades.

As a reminder, this Week in Review is focused on our existing positions as I took the holiday weekend to spend some extra time with the family. Here’s what’s happening with all our trades.

Nvidia’s (NVDA) earnings yesterday, with $82 billion of quarterly revenue, confirmed the semiconductor supercycle. Another blockbuster quarter and rosy forecasts don’t seem to be pushing the stock upward today. Perhaps there are just too many new AI stories out there capturing the headlines. Overseas, Samsung and other chipmakers are booming, and Samsung now accounts for 25% of South Korea’s annual exports.

The situation in the Middle East seems to be in a relatively stable period, though a steady stream of headlines about limited transit through the Strait of Hormuz serves as a constant reminder that things can change at any moment.

Spillover effects from the Strait closure continue to put upward pressure on the price of oil and bond yields and are exacerbating affordability concerns as we get closer to the busy summer season. This has driven a wave of underperformance in many consumer and retail stocks (for example, Shopify (SHOP) looks just awful).

Just the other day it seems, software ruled the world and the stock market. Now semiconductor chips are the top dog of the stock market, AI, and geopolitics. Chips are essential to the AI build-out, and this has created supply shortages, pushing up prices and igniting an investment frenzy.

Are stocks way overvalued? Not by recent standards.

On a trailing price-to-earnings basis, yes, the S&P 500 is fairly overcooked at the moment, trading at just under 29x earnings – close to a five-year high. But the index has a forward P/E ratio of “only” 21 – below the 22-23 ratio it traded at for much of 2024 and 2025.

Cannabis company earnings season is back. In the past two weeks, virtually all of our model portfolio companies have reported first-quarter results.

To save you the time of listening to lengthy earnings calls and plowing through press releases and filings, I recently did this for you to distill out the major trends that could benefit us as cannabis investors. Below are the top 10 sector trends in the space and what they mean for you, the cannabis investor.

The market’s record run is starting to show signs of fatigue. After powering higher since the March 30 lows, momentum has stalled and breadth has narrowed as a combination of rising yields, higher energy prices and renewed geopolitical uncertainty begins to weigh on sentiment.

The 10‑year Treasury yield has climbed from roughly 4.23% in mid‑April to 4.48% as of mid-morning today (matching the March high, and highest level since last July), meaning that financing costs are going up just as inflation concerns resurface. April’s CPI and PPI inflation reports both came in hotter than expected.

The market hit another new high this week. But earnings season is mostly over, and the war just won’t go away.

While there is still headline risk, investors are looking beyond the war. The earnings season has been great. According to FactSet, the average S&P 500 earnings growth rate, with 89% of companies having reported, is 27.7%.

If you have the feeling that this year’s boom in the tech sector—and the corresponding record highs in the major averages—isn’t being felt on a market-wide basis, you’re not imagining it.

As it turns out, the record lift in the Nasdaq and S&P is being driven by a troublingly small number of stocks. The result of this narrowing market is that value-focused investors like us have been forced to exercise patience while waiting for the boom to visit our corner of the market (more on that in a minute).

WHAT TO DO NOW: Big picture, the market and most leaders look great, and our market timing indicators are in fine shape. Near-term, though, there’s little doubt things have gotten a bit giddy, with many names and indexes extended to the upside. Tonight, we’re placing Cava (CAVA) on Hold as that stock has been caught up in some group weakness; we’ll hold our 45% cash position for now, but stay tuned, as we’d like to add some new names (or add to existing names) in the near future.

What a difference a month can make! What an April! The S&P rose 9.6% in April, making it the best single month for the market in six years. It hit an all-time high on Friday.

Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of some skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings. And for good reasons.

The results are in for the month of April. It was fabulous. The S&P rose 9.6%, making it the best single month for the market in six years. It hit an all-time high on Friday.

Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of minor skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings.

Now before you call me crazy concerning today’s newsletter headline, hear me out.

Even though large-cap names have garnered more than a fair share of attention among investors this year, I think a case can be made that companies with big capitalizations have a lot more room to run higher before they can be truly regarded as “overbought” or “played out.”

The market is digesting the push and pull of higher oil prices, a deeply divided Federal Reserve, prospects for a prolonged blockade of the Strait of Hormuz and fading momentum from the AI trade that helped push markets to all‑time highs earlier this month.

Despite the crosscurrents, the overall tone still tilts bullish, supported by investor comfort (for the time being) with the geopolitical tension, resilience in the U.S. economy, and improving visibility into earnings growth over the coming quarters.

Astronics (ATRO) Delivers

WHAT TO DO NOW: Cava (CAVA) was in a very solid uptrend and hitting new 52-week highs a few weeks ago, but it’s been a steady decline since, and last week’s horrid earnings reactions from some peers look like they’ve changed perception—we’ll cut our loss on our half-sized stake here. On the buy side, we’ll start a half-sized stake (5% of the portfolio) in Axsome Therapeutics (AXSM), getting back into a biotech name that has years of big growth ahead of it. Our cash position will still be around 45%.

National Energy Services (NESR) and Perpetua Mining (PPTA) Deliver

CoreWeave (CRWV) and BridgeBio (BBIO) Report

FTAI Infrastructure (FIP) reported a strong Q1 that underscored both earnings momentum and a clear capital allocation roadmap following the previously announced sale of Long Ridge.

Earnings Updates: ELA, ALNT, XMTR

Earnings updates for TFPM & PRMB. Rating Change for FTI

New Ratings for DigitalOcean (DOCN), Advanced Energy Industries (AEIS) and FTAI Aviation (FTAI)

IDEAYA (IDYA) Earnings Keep Daro on Track

MasTec (MTZ) and TechnipFMC (FTI) Deliver

Applying principles from Benjamin Graham, Warren Buffett and other top value investors to bring you the bast value candidates.

Here are 10 of the soundest rules, tools and principles for selling winning stocks.

Cabot Top Ten Trader is meant to be something where we do the first four or five steps of the process for you and then let you take it from there.

I explore how to build a reasonably diversified portfolio based on a value investment approach.

Here’s a step-by-step guide to investing with the Cabot Benjamin Graham Value Investor.

I want to point out a problem that I foresee, potentially on the scale of the technology bubble in 2001 and the housing bubble in 2007. I think we’re going to have an “inverse ETF bubble.”

The fundamentals of value investment have been time tested. Followers of the value philosophy such as Warren Buffett, Seth Klarman and Howard Marks have amassed billions of dollars in their lifetimes. In a nutshell, here are the basic tenets of value investing.

One of the things many investors like best about dividend income is that it can qualify for the lower Federal capital gains tax rate. But not all dividends and distributions qualify.

We recently added a new real estate investment trust (REIT) to the High Yield Tier. REITs can be a great source of high income, but they have some unique features that investors should be aware of.

For growth stocks, buying low usually doesn’t mean you’re getting a bargain. It usually means you’re buying a laggard! That’s right—believe it or not, in the market, strength tends to lead to strength, while weakness tends to lead to weakness.

So how can you pick stocks that have a good chance to become winners? Interestingly, the best way is by looking backwards!

Here’s how Cabot Trend Lines, Cabot Tides and the 7.5% Rule can keep you on the right side of every market.