Cabot Top Ten Trader Issue: June 30, 2025

More Names Join the Parade

Almost as quickly as it started, investors’ worries over the recent Middle East flare-up have faded to the background, allowing the bulls to consolidate their control over the market’s main trend. And even as tariff-related headlines have lately crept back into the news, stocks have taken it all in stride by showing a remarkable tendency to ignore what would normally be considered “bad” news. In view of these developments, we’re pleased with the market’s resilience—and it’s also welcome that it hasn’t become overheated with too much enthusiasm yet. By way of caveat, however, we’re still seeing a few flies here and there, as certain stocks are having trouble breaking above resistance, while institutional-quality leadership still hasn’t completely formed. But a growing number of stocks are joining the parade (including some multi-week laggards), with a nice mixture of growthy and cyclical names getting into sync with the general march forward. All told, we like what we’re seeing, and in view of the continued strength, we’re raising our Market Monitor to a level 8.

This week’s list features names across multiple industries, which we view as a sign that categorical market strength continues to build. Our Top Pick is Amer Sports (AS), which has tightened up nicely during the past few weeks as the 25-day line has caught up. We’re fine entering here or (preferably) on a dip.

Stock 1

Akero Therapeutics (AKRO)

Why the Strength
Akero is a clinical-stage cardio-metabolic biotech with a prominent position in the treatment of Metabolic Dysfunction-associated Steatohepatitis (MASH), a serious liver disease that can lead to a dangerous buildup of liver fat and scarring; it’s caused by underlying conditions like obesity, metabolic syndrome or Type 2 diabetes. Akero’s leading drug candidate is efruxifermin (EFX), a genetically engineered fusion protein designed to mimic the activity of the native hormone FGF21, which plays a crucial role in regulating metabolism and alleviating cellular stress. Earlier this year, Akero released strong results for its mid-stage trial of EFX against the liver disorder MASH, which it said led to a reversal of cirrhosis with no worsening of MASH fibrosis in 39% of patients. An analyst at a major investment bank called the data “game-changing” for Akero, noting that the latest trial results challenge the prevailing belief over the reversibility of cirrhosis “while also likely to reduce the need for liver transplants—a win for patients that, until now, have had few options.” What followed was a series of upgrades of the shares among analysts, prompting some of the share price strength, with additional strength coming on the heels of buyout rumors. On the latter score, the stock soared last month after a highly publicized report said Akero is considering a potential sale of the company in response to a takeover bid from an unnamed “strategic buyer.” And after pharma giant GSK recently agreed to acquire competitor Boston Pharmaceuticals’ lead asset, the MASH candidate efimosfermin alfa (for around $2 billion), takeover expectations for Akero have only increased. On the financial front, Akero has no earnings or revenue yet as it’s still in the developmental stage, but the company believes its $1.3 billion in cash holdings will be sufficient to fund its current operating plan into 2028. Moreover, it estimates that by 2030, an estimated three million Americans will have MASH cirrhosis, which is the fastest growing cause of liver transplants and liver cancer in the U.S. and Europe, so the addressable market is substantial. Topline results for its Phase III EFX study for MASH are expected in the first half of 2026. It’s an intriguing story.

Technical Analysis
AKRO hit a lifetime high at 58 in mid-2023 but fell out of favor for a while in the wake of disappointing clinical results for its lead drug candidate, sending shares plummeting to 11. Since then, shares have recovered, but in a typically choppy fashion for an admittedly speculative situation. But aside from the broad market-induced weakness earlier this spring, the shares have spent a good part of the past year climbing back to resistance, with AKRO currently just under the all-time high. It’s not for the faint of heart, but we’re OK with a nibble here or on further minor weakness with a loose stop.

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Stock 2

Amer Sports (AS) ★ Top Pick ★

Why the Strength
The market has lately brushed off tariff fears and consumer weakness, sending sporting goods giant Amer Sports to all-time highs. Amer is the parent company of 11 sporting goods brands, with outdoor technical clothing brand Arc’teryx, ski and shoe brand Salomon and ball and racket maker Wilson the three largest (and collectively accounting for 90% of revenue), with niche baseball and ski brands rounding out the business. Shares had surrendered 33% of their value from January through April on the Trump tariffs, but sentiment reversed when management told Wall Street that the worst-case scenario—a 145% tax rate on goods made in China—would clip just five cents a share from earnings. It doesn’t look like the worst-case scenario will come to pass, but even if it does, Amer has a secret weapon: Trump’s taxes stop at the U.S. border. Only 10% of Amer’s worldwide business is potentially affected by import taxes based on country of production. Most of Amer’s growth comes from Asia, particularly mainland China, where Arc’teryx and Salomon are especially popular. Meanwhile, China’s recent successes in Olympic tennis have brightened prospects for Wilson. Indeed, Amer has a strong retail store presence in China, with a few hundred stores that it is seeking to move upmarket, shuttering older stores for larger footprints that allow Amer to show off its products as more premium offerings. The Americas and Europe are equally important for business since they each contribute roughly one-third of sales, with the U.S. contributing 26% of sales. Business segments in its European market are slow growers even in the best of times, but China and the rest of Asia offer massive growth potential: sales in China alone jumped 43% in the first quarter (which was actually a little slower than prior periods), with similar rates in the broader region. That growth has come even in spite of Chinese consumers showing some weakness in other retail categories, suggesting Amer’s brands have a solid hold on consumers. Even facing Chinese and American consumer strength concerns along with tariffs and unfavorable foreign currency rates, Amer management raised guidance in May, saying 2025 should produce a revenue hike of around 17%, to just over $6 billion, with per-share earnings leaping by an anticipated 63%. It’s a solid story.

Technical Analysis
AS ran up from 10 last August to 34 in late January with barely any pullback along the way, driven by strong sales and profitability across all its regions and channels. It met with strong resistance at that level, however, and turned down with the rest of the market over tariff concerns. After touching down at 20 earlier this spring, the stock regrouped while investors reassessed the tariff outlook, allowing AS to resume its advance. Last month, it broke through the prior highs at 34 thanks to the latest quarter’s earnings results, allowing the stock to reach new highs on outstanding volume. We’re fine entering here or on a dip.

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Stock 3

Broadcom (AVGO)

Why the Strength
Software and infrastructure hardware maker Broadcom has become one of the world’s largest companies—a $1.27 trillion market cap—on the strength of AI. In its second quarter, AI networking sales leapt 170% and AI semiconductor revenue rose 46%, helping the overall business post a 20% revenue gain year over year to $15 billion. Given AI is so resource-intensive, it’s a positive that Broadcom’s AI-related sales are concentrated among the hyperscalers, with four of the top six as customers (including Alphabet, ByteDance, and most recently added, Meta). Management says their hyperscale customers continue to spend heavily, with money pouring into equipment to help them train their AI models, with the goal of showing investors that all the money they’ve spent on the technology so far is paying off. That means cutting-edge products like Broadcom’s Tomahawk 6, rolled out in May, should see excellent demand. (The product allows massive data transfers, permitting clusters of 100,000 AI accelerators to train models faster while cutting bandwidth and energy needs.) With all the growth in AI, Broadcom’s traditional business lines in server storage and wireless and industrial infrastructure may be overlooked. They are sizeable, but vary with the general corporate environment, so in the current Q3, sales in those areas are expected to be flat. It’s in AI where the growth lies, with management seeing AI-related revenue jumping 60% over the year, bringing total sales to around $16 billion—a 21% advance if realized. Another driver is conversion of customers of VMware, acquired last year, to a subscription model, which promises larger, more predictable revenue. About half of VMware customers have already been switched over, with the rest to come over the next couple of years. Overall, the potential is eye-popping for Broadcom. Analysts expect 22% top-line growth this year, with AI accelerators alone expected to generate as much as $90 billion in sales by 2027.

Technical Analysis
AVGO took a big hit during the trade war sell-off, plunging by 30% to around 135 by April. However, shares fairly quickly reversed the move in what amounted to a classic V-bottom formation, overcoming the 50-day line in late April, which in turn accelerated the rally. The stock broke through the old ceiling at 244 last week and went on to reach new record highs. We’ll set the buy range down from here, looking to enter on a normal exhale.

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Stock 4

DoorDash (DASH)

Why the Strength
DoorDash hit a few speed bumps early on in the market advance, but the story here is as good as ever, with rapid and reliable sales and free cash flow growth likely for many years, which continues to attract big investors. The firm is the King of Delivery, operating a network with advanced logistics for restaurants and, increasingly, for other categories too, including grocery (a quarter of the firm’s monthly users are ordering grocery delivery at this point, while a majority of the top 20 grocers are on the firm’s platform), drug, liquor stores and convenience stores, not to mention internationally, where its Wolt operations positioned it as the leader in many markets across Europe. Interestingly, DoorDash has usually shied away from big M&A, but this year it has made a couple of splashes: First, for $1.2 billion, it bought SevenRooms, a software provider to the hospitality industry that should provide merchants with more customer attraction and retention tools (thus making them stickier with DoorDash), while also possibly getting the firm more into the hotel delivery space. It also doled out $3.9 billion for Deliveroo, an international delivery firm (in nine European countries, with a one-third share in Britain) that will dramatically bolster its European presence (Wolt, acquired in 2022, is doing well in many European areas). That does introduce some uncertainty, of course, but also lots of opportunity, as DoorDash’s management has consistently made the right moves regarding expansion over many years. Meanwhile, the underlying business is doing just fine: In Q1, orders lifted 18%, revenue was up 21% and EBITDA was up 59%, while free cash flow of $494 million came in around $1.20 per share, which was miles ahead of reported earnings. It’s a good story, and the new buyouts could accelerate growth moving ahead if all goes well.

Technical Analysis
DASH broke out last September and had a gorgeous run from there, with nine weeks up in a row and, after a brief rest, another move higher into February. The correction during the market’s maelstrom was actualy well controlled (28% deep), and shares looked ready to get going in May…but earnings dented the stock for a couple of days. Still, since then, it’s been nearly all up, with shares moving to new highs last week after some tightness near the prior highs. As with many names, we favor entering on a pullback of a few points.

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Stock 5

Freeport McMoRan (FCX)

Why the Strength
Strengthening copper prices as the result of a global supply squeeze of the metal, plus record-high gold prices, have combined to form a benign backdrop for Freeport. The Phoenix-based company is one of the world’s largest copper and gold miners and is benefiting from rising prices for both metals. Copper comprises 77% of its annual sales and gold accounts for 21% of sales, with the former coming on the back of the recent tariff-related rush for industrial users of the red metal, while demand for the yellow metal has been persistent this year in the face of ongoing geopolitical turmoil and worries over inflation. But copper is Freeport’s primary focus, and on that front, benchmark prices for the metal rose to the highest level in four years, which is putting additional pressure on an already tight global copper market. Most of the metal’s flows are to the U.S., where traders are directing it to take advantage of currently high premiums in the spot market ahead of the results of a federal investigation into copper imports (expected in November) that could result in significant tariffs if it finds that copper imports pose a threat to national security. (By one estimate, due to Freeport’s leverage to copper prices, an increase of as little as ten cents per pound in prices could add approximately $425 million (!) to its annual EBITDA.) Meanwhile, industrial demand for copper among developed nations worldwide is projected to increase this year, with major consumers like China using more of the metal in support of copper-hungry industries like electric vehicles (EVs) and renewable energy, along with increasing infrastructure and urbanization uses. (Indeed, several industry reports have suggested that China’s copper inventories have fallen to dangerously low levels and risk depletion at some point this year, placing additional upward pressure on prices and benefiting Freeport.) Although its Q1 results were mixed, with revenue of $5.7 billion declining 9% year-on-year, while earnings of 24 cents a share beat estimates by 3%, copper and gold production was strong, with copper sales exceeding expectations. Management expects cash flow and EBITDA trends to strengthen in the second half of the year, with a potential $800 million annual financial benefit from the premium pricing of U.S. copper sales—and with electrification trends and infrastructure investments providing additional longer-term support. Analysts see top- and bottom-line growth of 6% and 12%, respectively, which is likely too conservative in view of copper’s ongoing strength.

Technical Analysis
Despite its exposure to gold, FCX didn’t benefit from the comprehensive strength across a big part of the mining sector for most of the past year. Volatile copper prices contributed to the lagging performance, but with the red metal on the upswing, the stock has flourished in the last couple of months and, significantly, is building forward momentum. Last week’s breakout to six-month highs on solid volume underscored this, and we think starting a small position here or (preferably) on a dip is a reasonable risk/reward proposition.

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Stock 6

Micron Technology (MU)

Why the Strength
Micron Technology has historically been a boom-or-bust chip name, with its flash storage offerings (DRAM and NAND) seeing steadily higher demand in terms of capacity due to all the advancements…though prices fall over time, so when things are good, earnings can go wild, but during softer times, they hit the skids. Happily, today is in the midst of boom times, and big investors are starting to discount that, like many firms, the AI and data center boom is helping, with data center revenue doubling in the recently reported quarter (ending in May). The firm is the sole big-volume supplier of low-power DRAM chips to the data center market, which is one reason their high-bandwidth memory revenue was up 50% sequentially (!) in the quarter. Plus, the top brass said it’s now the #2 player by share in data center for NAND that works with solid-state drives for the first time ever, while its new 1-gamma DRAM offering (currently being qualified by customers) gives it a leadership position and should ramp going forward. Of course, the PC and smartphone markets aren’t as strong, but they’re steady. All told, the quarter produced another set of huge numbers, with sales up 37% from a year ago and up 15% from the prior quarter, while earnings of $1.91 tripled and topped expectations by a huge 31 cents. More importantly, the firm guided toward another 15% sequential gain in revenue for the August quarter, with analysts seeing the next fiscal year (which starts in September of this year) producing earnings of $12 per share or so (likely to prove conservative). To be clear, Micron will never be valued like a long-term growth company because it’s not, but with many quarters of growth ahead, and with the stock having “just” bottomed three months ago (with the market in April), we think this upcycle can take the stock meaningfully higher over time.

Technical Analysis
MU had an excellent run from the growth stock breakout in November 2023 to June of last year, but selling from there was intense, with shares falling 45% within a few weeks and, after months of going sideways, MU cascaded to near 60 at this year’s low. The snapback from there was quick, with a gap back to the 200-day line in May and then, this month, a persistent advance all month…until earnings brought in some selling. We think (a) the dip could go further, but (b) the odds are big that this dip will prove buyable—aim to enter on a bit more weakness.

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Stock 7

Royal Caribbean (RCL)

Why the Strength
Royal Caribbean is the leader in the cruise sector, operating under its namesake brand as well as Celebrity, SilverSea and others, with more than two dozen ships on the water. The seemingly never-ending travel boom since the pandemic has kept booking strong, capacity tight and prices elevated, with more add-on revenue from onboard experiences and activities also helping the cause. (Five new ships launched last year and in 2025 have exceeded expectations for revenue and bookings, respectively, another sign demand is outpacing supply.) Q1 was another great one, with total revenue up 7%, revenue-per-passenger-day (almost like same-store sales growth for a retailer) up 6%, but cruise costs (excluding fuel) were flat, driving a 20% gain in EBITDA and very healthy cash flow ($1.6 billion from operations). While the firm doesn’t release specifics, the more important tidings came from bookings, especially during so-called WAVE season (January to March when cruise lines offer deals for future sales); the top brass said first-quarter bookings outpaced last year’s record across all products and that continued into April, with the overall book position coming in at higher prices. When the firm issued guidance back in April, the world was in tariff turmoil, but even then the top brass saw a bullish year, with total capacity rising 5.5% on the year, revenue-per-passenger-day up 4% or so and earnings of around $15 per share—and, of course, since then, the world’s economic outlook has gotten brighter, with fears of a big pullback of consumer spending fading. While a slowdown will eventually occur, cruises do seem to be taking share in the massive $2 trillion global vacation market, so the trends here are all pointed up.

Technical Analysis
RCL isn’t in the first inning of its overall run, as the travel boom has driven the stock higher for the past couple of years. That said, after a brief double top in December and January, shares went through the wringer during the market’s downturn, with a 41% correction bringing RCL below its 200-day line and down to levels seen last September. Obviously, the rebound has been very solid, and while the stock did hesitate near its prior highs, last week’s big-volume ramp (even before Friday’s rebalancing-affected volume) was a good sign. We’ll set our buy range down a bit from here, looking for a normal exhale to enter.

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Stock 8

Sea Ltd (SE)

Why the Strength
Singapore-based Sea Ltd. (covered in the April 28 issue) is one of Southeast Asia’s and South America’s leading online sales, entertainment and financial service providers, with offerings ranging from the e-commerce-focused Shopee to the digital gaming Garena segment. Additionally, Sea has a thriving digital payments arm (Monee, formerly SeaMoney) and digital bank (MariBank) aimed at Singaporeans, as well as customers across several Southeast Asian countries, plus Brazil. All three businesses showed stellar growth in Q1, contributing to total revenue of $4.8 billion that soared an eye-opening 30% year over year, while earnings of 83 cents a share missed estimates by eight cents but nearly tripled from last year’s Q1. By segment, Shopee led the charge for Sea and delivered a record-high gross merchandise volume (GMV, a key metric) of $29 billion (up 22%) plus gross order volume for the quarter of $3 billion (up 21%), with “sustained market leadership with improved profitability” across its main markets in Asia and Brazil. Monee, meanwhile, saw revenue and adjusted EBITDA grow more than 50%, while Garena had a “stellar start” to 2025 and its best quarter in four years, thanks to the success of a major video game collaboration in January, with the firm’s top-rated, free-to-play Free Fire game’s daily average user (DAU) levels near peak quarterly average DAU during the pandemic. (Free Fire was the world’s most downloaded mobile game in 2019 and surpassed $1 billion in lifetime revenue by 2021; it still boasts around 60 million monthly active users.) Elsewhere in its financial services business, the newly rebranded Monee/Maribank segment delivered strong revenue and adjusted EBITDA growth as the banking business continues to scale, thanks to increasing customer deposits. (The company said Monee is already one of the largest unsecured consumer lending businesses in Southeast Asia.) Going forward, Wall Street sees the momentum continuing, and when Sea reports Q2 results next month, analysts expect 31% sales growth and EPS (up 13% sequentially) of 94 cents.

Technical Analysis
After a violent shakeout in early April, SE rebounded strongly and has continued to show strength in the last several weeks since then. The recent push to new highs above 170 earlier this month was followed by a shallow dip that found support above the 50-day line, and the stock has been tightening up nicely in the last couple of weeks. We think the path of least resistance remains up and are OK starting a position here, but use a looser leash if you enter given SE’s volatility.

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Stock 9

Snowflake (SNOW)

Why the Strength
Under its new management, cloud giant Snowflake has raised Wall Street’s expectations that the firm can increase the pace of innovation, while further growing its footprint in data engineering and AI. The company’s new CEO was acquired earlier this year, and recent financial results under his guidance have prompted a number of analysts to up their share price ratings for Snowflake (a reason for the stock’s strength), including a major investment bank that last week initiated coverage of the stock with an “overweight” rating on its improved product engineering, “sharper” execution and improved product revenue growth near 30%. In last month’s earnings report for fiscal Q1 (ended April), Snowflake delivered product revenue of just over $1 billion that increased 26% year-on-year, with remaining performance obligations (RPOs, or unearned revenue from signed contracts) of $6.7 billion, up 37%. Earnings of 26 cents a share, meanwhile, beat estimates by a nickel. Other highlights of the quarter included more than 600 customers with trailing 12-month product revenue of greater than $1 million, along with 754 customers among Forbes Global 2000 companies. During the earnings call, the top brass emphasized its growth in AI over just the last year, with the firm adding over 5,200 accounts using its AI and machine learning offerings on a weekly basis, with its Cortex suite of AI-powered features and services built directly into the Snowflake data warehousing and engineering platform. On that front, the company also just launched its first AI-powered migration enhancement tool, which allows customers to use Cortex to test and review issues during their cloud migration journey. Additionally, Snowflake expanded its footprint further into the automotive sector through its new solutions for AI data cloud for manufacturing, with clients including CarMax and Nissan, which use the tools to boost productivity. (More recently, Snowflake further showcased newer advanced AI capabilities at its annual summit in San Francisco, prompting a wave of institutional share price upgrades.) Looking ahead, Snowflake guided for fiscal 2026 product revenue of $4.3 billion (up 24% if realized). Wall Street sees earnings up 33% for the full year.

Technical Analysis
After a tough downturn between February and September last year, which saw shares decline 55%, SNOW turned the corner later in the year on a strong earnings report. Starting with a huge-volume leap in November, shares ran up to nine-month highs by February before dipping with the rest of the market into early spring. But the last three months have witnessed a return to strength, with the stock powering back to just below the old high (and helped by the strong Q1 earnings). We’re OK starting here or (preferably) on a minor dip.

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Stock 10

Zscaler (ZS)

Why the Strength
The FBI, along with several top cybersecurity companies, are warning that a prolific hacking group is targeting the U.S. transportation sector, including airlines, as the traditionally busy summer travel season gets underway. Highlighting this threat was news last week that major passenger carrier Hawaiian Airlines is working to secure its systems following a cyberattack, while Canada’s second-largest airline, WestJet, suffered an unresolved cyberattack earlier this month. The increased awareness of such threats has placed cybersecurity specialist Zscaler (covered in the May 5 issue) in the spotlight: Its offerings address cybercrime by providing a cloud-based comprehensive security platform that uses a zero-trust approach to protect users and applications from various threats while also allowing them to connect securely to various applications and data without traditional VPNs. At a recent industry conference, Zscaler unveiled its latest AI-driven innovations for enhancing data security and stopping cyberattacks, which impressed analysts (and was a reason for the latest share price strength). The conference also underscored a new procurement plan that has already garnered more than $65 million in total contract value bookings in the last several weeks (including a Fortune 500 technology customer that increased spending by more than 40%). Recent financial results are another reason for Wall Street’s optimism, with fiscal Q3 (ended in April) revenue of $678 million increasing 23% from a year ago and per-share earnings of 84 cents beating estimates by 11%. Management said the proliferation of AI in all aspects of the firm’s business has increased demand for its AI security offerings, prompting Zscaler to accelerate product innovation in this area (a key focal point for the company going forward). Other metrics were equally sanguine, including annual recurring revenue (ARR) of approximately $2.9 billion, representing the third straight quarter of 23% growth, with the outfit on track to reach $3 billion or more in ARR by the end of fiscal Q4. Zscaler further guided for Q4 revenue of $706 million, up 19% if realized, and EPS of 80 cents. Wall Street sees multiple years of 20%-ish sales growth ahead. It’s an exciting growth story with multiple short-term and secular tailwinds.

Technical Analysis
ZS spent the better part of a year building a base between 160 and 210, with the price line alternating several times between those two extremes along the way. It held up well during the early stages of the February-April market implosion but ended up having a quick shakeout in early April. Even so, the stock showed impressive relative strength throughout the broad market sell-off and broke out later that month. The shares have been up in 10 of the last 12 weeks, supported by excellent volume trends. If you don’t have a position, we’re fine using pullbacks to nibble.

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Previously Recommended Stocks

The next Cabot Top Ten Trader issue will be published on July 7, 2025.

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