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 May issue of Cabot Early Opportunities looks past the recent index noise to focus on three companies with stable businesses and high potential for upside surprises.

Whether it’s a software backbone supercharged by AI coding, a pharmaceutical cash-flow compounder, or a biometric network expanding far beyond airport gates, these businesses offer structural growth at a solid value right now.

All the details are in the May issue of Cabot Early Opportunities.

The S&P 500 and Nasdaq briefly tagged record territory on Thursday, buoyed by a wave of semiconductor enthusiasm and optimism surrounding President Trump’s summit with Chinese President Xi Jinping, only to give most of it back Friday when oil prices surged back toward $105 a barrel and Treasury yields climbed — a toxic combination for a market that had already run hard. For the week, the S&P 500 eked out a gain of roughly 0.3%, while the Nasdaq slipped 0.2%, the Dow fell 0.2%, and the Russell 2000 was the notable laggard, falling close to 2% as small caps bore the brunt of Friday’s broad selloff.

It’s been a great seven-week run, especially in leading stocks, but we’ve clearly hit our first major pothole in most names, with some sharp dips on Friday and especially today. As always, we’re not complacent—should the market and/or leading stocks really tip over, we’ll turn more cautious. But, to this point, the intermediate-term evidence remains in great shape for the market, and even for the dented leading AI stocks, the vast majority of action has been unpleasant, but normal, to this point. Thus, we remain optimistic, though to respect the pullback, we’ll move our Market Monitor down one notch to a level 7 today.

This week’s list has a nice mix of stocks, including many strong names that are either pulling back normally or refusing to budge. Our Top Pick is a mid-cap biotech outfit with one huge-selling product and gushing sales and earnings growth.

Cracks are forming under the market’s surface in the face of myriad headwinds, but for the most part, stocks have held up well on the heels of a historic six-week run. That said, it makes sense to play things a bit closer to the vest right now, so today we take our foot off the growth pedal and add a value stock that’s a household name. It’s a company I recommended to my Cabot Value Investor audience earlier this month – a true growth-at-value-prices opportunity.

Details inside.

The S&P 500 and Nasdaq briefly tagged record territory on Thursday, buoyed by a wave of semiconductor enthusiasm and optimism surrounding President Trump’s summit with Chinese President Xi Jinping, only to give most of it back Friday when oil prices surged back toward $105 a barrel and Treasury yields climbed — a toxic combination for a market that had already run hard. For the week, the S&P 500 eked out a gain of roughly 0.3%, while the Nasdaq slipped 0.2%, the Dow fell 0.2%, and the Russell 2000 was the notable laggard, falling close to 2% as small caps bore the brunt of Friday’s broad selloff.

The S&P 500 and Nasdaq briefly tagged record territory on Thursday, buoyed by a wave of semiconductor enthusiasm and optimism surrounding President Trump’s summit with Chinese President Xi Jinping, only to give most of it back Friday when oil prices surged back toward $105 a barrel and Treasury yields climbed — a toxic combination for a market that had already run hard. For the week, the S&P 500 eked out a gain of roughly 0.3%, while the Nasdaq slipped 0.2%, the Dow fell 0.2%, and the Russell 2000 was the notable laggard, falling close to 2% as small caps bore the brunt of Friday’s broad selloff.

The S&P 500 and Nasdaq briefly tagged record territory on Thursday, buoyed by a wave of semiconductor enthusiasm and optimism surrounding President Trump’s summit with Chinese President Xi Jinping, only to give most of it back Friday when oil prices surged back toward $105 a barrel and Treasury yields climbed — a toxic combination for a market that had already run hard. For the week, the S&P 500 eked out a gain of roughly 0.3%, while the Nasdaq slipped 0.2%, the Dow fell 0.2%, and the Russell 2000 was the notable laggard, falling close to 2% as small caps bore the brunt of Friday’s broad selloff.

A couple of rain clouds have formed overhead, with the broad market starting to take on water and Treasury rates testing multi-month (or longer) highs, which does mean the risk of a sharp pullback or rotation is elevated. That’s a good reason to be selective on the buy side, but with the primary evidence (trends of the market, action of growth stocks) very positive, we’re optimistic and looking to extend our line. This week we sold one name and replaced it with another on Tuesday, and tonight we’re adding a half-sized position in another new position--though we’re keeping 37% in cash for now as cushion (and buying power) should things shake out.

After hitting a temporary bottom at the end of April, the markets have rebounded—albeit with a little volatility thrown in. They look pretty solid to me right now, but of course, there’s still the war with Iran that can cause quick changes, as investors try to assess the possible outcomes, and cope, at the same time, with rising prices that have led to inflation creeping back up (now 3.8%).

No doubt, price hikes in gasoline are affecting consumers, and the University of Michigan’s latest consumer survey reflected declining consumer sentiment; in fact, at 48.2, it was the lowest on records dating back to 1952.

It’s a mixed economic bag, though, as job openings, at 6.87 million, remain healthy and the ADP Employment Index actually came in at 109,000, considerably higher than the 84,000 forecast. The unemployment rate remained at 4.3% for April.

Even the very best investments get cheap from time to time, and they don’t stay cheap for long. Finding the bargains makes a big difference in investment success. Buying a stock at a bargain price makes a mediocre investment a strong one. It makes a good investment a great investment. It’s also crucial to seek out bargains in a high-priced market like this.

In this issue, I highlight a historically strong-performing stock that has temporarily reached the cheapest valuation in more than a decade. The ability to seize the current low price can make this historically good investment a great one.

The bulls made it six straight winning weeks, powered by a semiconductor surge that has shown no signs of slowing down. Also helping the mood: the April jobs report blew past expectations Friday, with the economy adding 115,000 jobs against a forecast of just 65,000.

For the week, the S&P 500 gained 2.3%, the Nasdaq led the pack with a surge of 5.4%, the Dow added 0.5%, and the Russell 2000 tacked on 1.9%.

Yesterday, four tech giants, Alphabet, Amazon, Meta and Microsoft, representing 22% of the S&P 500’s market value, reported strong quarterly earnings that highlighted the importance of AI.

You might think the above companies and their AI brethren are “asset light” companies but you would be very wrong.

It’s been a glorious April following a miserable March for the market. What happens in May may determine which direction stocks are headed for the rest of the year.

That’s probably overstating things a bit, but May should be crucial for the reasons we discussed last week: namely, the fate of the Iran war, but also the bulk of first-quarter earnings season and the introduction of a new Fed chair.

What war? This market is moving on. We may not be out of the woods yet, but investors are looking beyond the Iran war.

Stocks have already made up all losses from a rough March and then some. The S&P 500 had fallen 7.7% in the month of March by the 30^th. Since then, the index has rallied over 13%. The S&P is now at a higher level than before the war began and is hitting new all-time highs.

The other day I was paid a visit by a roving ISP salesman who was pitching his company’s fledgling internet service over the local monopoly’s. We struck up a conversation and he asked what I did for a living. When I told him, his eyes lit up and he asked, “Got any good stocks you can recommend?”

Without thinking I blurted out, “Anything AI-related. You can’t go wrong.” The advice was only semi-facetious, for there’s undeniably a degree of truth behind it. My instinctive response to that question also prompted me to consider the question: just how long can the broad market continue its “all things AI” run without broader sector participation

Note: I’m out of town this week, so I’ll be a bit briefer on the update today—but I’m still checking my laptop a couple of times a day if you have any questions or comments. I’ll be back at my desk come Monday. Cheers.

WHAT TO DO NOW: Remain optimistic. The market and some leaders have hesitated, but all of our market timing indicators are bullish, and most stocks we own or are watching are working. Last Friday, we bought a half-sized stake in Nebius (NBIS) and added a 3% additional stake in ProShares S&P 500 Fund (SSO); earlier this week, we sold our small remaining position in GE Aerospace (GE); and tonight, we’ll buy a half-sized position (5% of the portfolio ) in Cava (CAVA). We’ll still have 46% in cash or so after these moves.

Despite all the headline noise lately we’re marching deeper into first‑quarter earnings season with the market’s path of least resistance still pointing higher.

Optimism around the extension of the tentative ceasefire in the Middle East has reduced geopolitical anxiety to a seemingly manageable level. The U.S. economy continues to show resilience, and the corporate earnings outlook points toward meaningful growth in the coming quarters and years.

The old saying, “History doesn’t repeat itself, but it rhymes,” is an apt one for the stock market these last two years.

In early 2025, the S&P 500 raced to new all-time highs before peaking in late January/early February, only to get dragged down in March and April by a geopolitical crisis (tariffs/Liberation Day), before rallying in a V-shaped pattern as the severity of the crisis abated.

The market turned on the afterburners. The S&P 500 made up all the March losses and catapulted to a brand new high in a remarkably short time. It’s a market that sure looks like it wants to go higher. But stocks are being held back this week by more war uncertainty.

The current ceasefire with Iran expires on Wenesday night. Talks may not happen, and war talk is growing. The resumption of the war will almost certainly prompt a decline in the market. Aside from that near-term threat, investors are clearly looking past this war. Hopefully, it won’t last much longer.

The market came roaring back to new highs last week after a tough March. But the war isn’t over yet, and there could be more bouncing around in the weeks ahead.

Investors are clearly already looking past this war, as there is a high degree of optimism that hostilities will soon end. There is probably still a big rally or two left in the tank when the war actually ends. Sure, there is still headline risk in the meantime. But the war is clearly fading as the biggest market catalyst and giving way to earnings.

The old adage that markets trade on expectations, not news, was certainly validated in the wake of President Trump’s announcement last weekend of his intention to block the Strait of Hormuz.

Although the announcement was initially made as a categorical threat against any and all incoming vessels, it was later softened to a more targeted blockade in which the U.S. and other non-Iran-bound ships are generally allowed to transit the Strait.

Markets have remained strong, with the Nasdaq up 11 days in a row and on track for its third consecutive up week. The S&P 500 is also on track to post gains for its third week in a row, and it looks like the S&P 600 SmallCap Index will post its fourth consecutive weekly gain.

Markets have proved to be resilient in making a comeback despite the backdrop of the conflict in the Middle East. The churning of sectors earlier this year has led to some bargains and momentum in stocks, from semiconductors to minerals and mining. This is paired with consumer and energy prices climbing steeply. Recent big bank earnings have been solid and volatile markets are good news to bank trading desks.

Microsoft (MSFT), FTAI Aviation (FTAI), Weatherford (WFRD) and Alamos Gold (AGI) Deliver

The Trump administration today rescheduled cannabis, at least halfway.

* Medical cannabis was rescheduled immediately by a formal order from the Justice Department (DOJ) and the Drug Enforcement Administration (DEA).

GE Vernova (GEV) Delivers in Q1

WHAT TO DO NOW: Today we’re going to make one move in the Model Portfolio—selling the rest of our small-ish position in GE Aerospace (GE), but we’ll be looking to put some money to work in the days ahead. Our cash position will be around 53% after the moves. Details below.

Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.

The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.

WHAT TO DO NOW: The market continues to rush higher, with a lot of good news released today helping the major indexes, though many growth stocks are resting while economically-sensitive names ramp. A short-term wobble is possibly after the last three weeks, and earnings season will surely throw us a few curveballs, but with the evidence turning very strong, we’re putting a bit more money to work today -- we’ll buy a half-sized stake in Nebius (NBIS) today and add a 3% position to our ProShares S&P Fund (SSO), leaving us with 48% in cash. Details below.

Sell Atmus Filtration (ATMU); Advanced Energy Industries (AEIS) Moves to Hold

WHAT TO DO NOW: Do some more buying. The evidence has continued to improve, with our Cabot Tides now positive, joining the Aggression Index last week. Of course, this is still a news-driven environment and with many names extended to the upside, there’s risk of an upcoming wobble. But we always go with the evidence, and with more green lights, we’re going to add to our stakes in three names we already own, buying 3% additional stakes in Marvell (MRVL), Dell (DELL) and Macom Tech (MTSI). That will leave us with around 56% in cash, though we’ll likely put more money to work soon if the bulls remain in control.

IDEAYA Biosciences (IDYA) Delivers Landmark Phase 3 Data

Our entire selling philosophy, especially when it comes to growth stocks, revolves around a concept we call “Tight to Loose.” We’re also big fans of a few key chart-based sell signals that tell you a stock is coming under distribution by deep-pocketed investors.

I’ve heard from a few subscribers recently who want to know if it’s time to sell their big winners, like Wynn Reports (WYNN), which is up 48% since I recommended it in April of last year.

Some stocks in the Model Portfolio and others we’ve recommended have had great runs during 2017 but have come under pressure recently. And that’s naturally led to a lot of questions about how exactly to handle big winners, so that’s what we’ll dive into today.

Here are some of the sources that I have found most useful, reliable and unique. One of them may be able to give you a new perspective on some of the stocks you own.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

This report explains my buy, hold and sell opinions for the Standard & Poor’s 11 sectors. In summary, seven sectors should fare quite well during the remainder of 2017, but other sectors will likely perform poorly in the months ahead.

Writing covered calls is a great way to boost your yield on stocks you already own, and involves a lot less risk than most investors think.

Dividend reinvestment is one of the most powerful weapons in the income investor’s toolbox.

The Cabot Emerging Markets Timer measures the intermediate-term trend of emerging markets-related stocks.

If you like the idea of buying low and calmly hanging on...this is the right advisory for you.

Here’s a list of the attributes I seek for any stock I consider for inclusion in Cabot Dividend Investor.

SNaC is the method chief analyst Paul Goodwin uses to choose stocks for the Cabot Emerging Markets Investor