Cabot Top Ten Trader Issue: October 6, 2025

Follow the Plan

The market’s uptrend continues, but as has been the case for many weeks, it’s somewhat tricky out there, with news-driven moves, selling on strength, the occasional bout of rotation and potholes—all while large swaths of the market are doing a lot more chopping than trending. That’s not “bad,” per se, but it remains a selective environment, though importantly, few leaders have actually cracked intermediate-term support even when we do see a wobble. All in all, we continue to take things on a stock-by-stock basis, focusing on strong names that are ideally fresher in their uptrends, while also being active with portfolio management, raising stops and taking partial (sometimes full) profits on the way up and cutting bait if a nascent breakout falls by the wayside. We’ll again leave our Market Monitor at a level 7 but will look to change it if we see some leaders break down or, conversely, the buying pressures spread and create more upside breakouts.

This week’s list again has a heavy growth component, and not all are in the AI realm, which we find encouraging. Our Top Pick is Shopify (SHOP), a blue-chip e-commerce name that, after a couple of false starts, looks like it’s ready to move.

Stock 1

Celstica (CLS)

Why the Strength
Contract manufacturing specialist Celestica (covered in the July 14 issue) partners with leading companies across numerous high-growth industries—including aerospace and defense, communications, healthcare and energy—to deliver whatever products they need. The firm’s Connectivity & Cloud Solutions segment (or CCS, which is focused on communications and enterprise hardware for data centers) now accounts for the bulk of Celestica’s business, representing 68% of sales and 79% of earnings, with growth in CCS being driven by the AI boom, making Celestica a critical player in the AI ecosystem. This was highlighted in Q2, with revenue lifting 21% from a year ago, earnings of $1.39 a share beating estimates by 16 cents and free cash flow of $120 million improving significantly from the year-ago $66 million, driven by its communications sub-segment and rapid ramps of new 800G and upcoming 1.6T high-speed networking and optical products for AI data center customers. Celestica’s involvement in these high-speed networking programs is part of a strategic shift toward higher-margin hardware platform solutions, helping it to move beyond its traditional contract manufacturing business. Not surprisingly, the top brass emphasized that the CCS segment continues to experience “very strong growth,” driven by the demand for networking products from hyperscale customers as they build out their data center infrastructure to support new AI applications. Celestica expects this segment to post nearly 30% growth for 2025, with anticipated demand from its customers being strong “going into the first half of next year.” (By contrast, the firm’s Advanced Technology Solutions, or ATS, segment—which serves aerospace/defense, health tech and smart energy customers—is expected to be flat for the year.) Looking ahead, the “strengthening demand outlook” for the CCS segment prompted management to guide for full-year sales and earnings to increase 20% and 42%, respectively. The Q3 report is due out October 27 (post-market), with Wall Street seeing 21% sales and 41% earnings growth.

Technical Analysis
CLS has been straight up from the market lows, with a huge run as perception improves. We owned it earlier in the recent run, taking a profit in August, and after the stock shook out to the 50-day line, it rallied to higher highs around Labor Day. It’s not early in the intermediate-term run, of course, but CLS has mostly tightened up since that pop as the 50-day line catches up—we’re OK buying some on a bit more weakness with a stop under that support line.

Weekly Chart

Daily Chart

Stock 2

Century Aluminum (CENX)

Why the Strength
Supply gluts of aluminum have been the norm for many years, but the global market for the metal is now facing major deficits—a “novelty” for the industry, according to one major bank—which in turn is boosting prices. A range of political developments—including aluminum-targeted tariffs in Washington, high energy costs for certain African producers, the loss of mining licenses in Guinea (the world’s largest producer of bauxite, the main aluminum ore) and reductions in annual production targets in China—have contributed to the shortfall. Century is well positioned to benefit from this development, as the U.S.-based producer is expected to see diminished competition due to U.S. tariffs on the metal, allowing it to sell its output at higher margins. Indeed, the company has planned for new smelter capacity to take advantage of the tariffs on foreign aluminum, including a restart of its Mt. Holly, South Carolina, smelter, currently operating at 75% capacity, to bring it to full capacity (more than 50,000 metric tons) by next June. Century intends to invest $50 million in the effort, which will expand total U.S. aluminum production by nearly 10%. Moreover, it’s also exploring a potential new smelter to further increase domestic production, which it said would double the size of the existing U.S. aluminum industry (although a site has not yet been selected). On the financial front, revenue of $628 million in Q2 increased 12% year over year, earnings of 30 cents a share jumped from a penny a year ago (though missed estimates by four cents), while adjusted EBITDA of $74 million more than doubled, thanks in part to higher metal and regional premium prices. In the earnings call, management pointed out that global aluminum inventories were near post-financial-crisis lows in Q2 (at 47 days), with U.S. demand for domestically produced billets (blocks or bars of the processed metal) growing 8% in the first half of the year due to the tariffs. The outfit further expects the “strong domestic demand growth” to support higher value-added aluminum premiums in 2026. Looking ahead, Wall Street sees earnings running up meaningfully this year and growing 30% in 2026, which is likely too conservative given the increasingly positive fundamentals.

Technical Analysis
CENX chopped its way higher into late last year, but then shares turned down, eventually falling about 50% during the market’s early-year plunge. The recovery from there was choppy but solid, with shares approaching their highs in early August before one last, controlled dip down to the 10-week line. But CENX broke out after that, and it just rose for its fourth straight week—all on above-average volume. We’ll set our buy range down a bit from here.

Weekly Chart

Daily Chart

Stock 3

Ciena (CIEN)

Why the Strength
Connectivity is obviously a key to the AI boom, and during the past few weeks, we’ve seen the networking group broaden out as different niches see demand picking up. Ciena is one of our favorites of that new wave of leadership: It’s always been a big leader in optical networking for many uses, and thanks to a recent acquisition of a firm called Nebis, it should be a growing player within the data center segment. That’s good, but even better could be a surge in data center interconnect business (also called scale-across networking), where, as the name suggests, big hyperscalers look to connect a few different data centers that are far apart (often dozens of miles), essentially creating monstrous AI “brains” that can work together—perfect for Ciena’s traditional long-haul offerings that are far out in front technologically (management says 18 to 24 months in the lead on the competition for a couple of key products). Last quarter, Ciena inked one of these deals that an analyst estimated is worth $200 million or so, but many are thinking there will be tons more where that came from, from big players going forward. The firm also serves telecom players, a business that’s been slow but should pick up going ahead, with all of the above contributing to booming results: Sales and earnings have turned up nicely the past couple of quarters (including sharply accelerating revenue growth), and analysts see fiscal 2026 (which begins next month) bringing a 75% earnings gain, and the way these trends go, that will likely prove conservative. Obviously, a hiccup in AI spending would dent perception of the stock, but it’s more likely that the boom continues and demand for data center interconnect offerings surges.

Technical Analysis
CIEN started to change character in the second half of 2024, though that move was given up during the big downturn earlier this year. The upmove from the lows was definitely solid, but it hit a pothole in June and then stalled out for a few weeks in August near the prior highs. But the quarterly report produced the breakout, and CIEN has acted superbly since, soaring higher with very little weakness. We’re not going to chase it here, but dips of a few points would be tempting.

Weekly Chart

Daily Chart

Stock 4

Grab Holdings (GRAB)

Why the Strength
Singapore-based Grab is Southeast Asia’s leading “super-app,” offering a wide range of services including ride-hailing, food and grocery delivery, plus digital payments, lending and even insurance, with operations across several countries in the region, including Indonesia, the Philippines, Singapore, Thailand and Vietnam. Ride-sharing and food delivery represent the bulk of Grab’s revenue, commanding a hefty 70% share of the ride-hailing market in Southeast Asia, along with a dominant share in the region’s food delivery market (around 55%). Helping to keep the firm’s growth story intact has been a market consolidation of recent years, as competitors like Gojek and FoodPanda have faced challenges, allowing Grab to capture additional market share both organically and via M&A, including acquisitions of Malaysian supermarket chains Jaya Grocer and Everrise, a restaurant booking platform called Chope, and plans earlier this year to acquire the Indonesian super-app, GoTo (although regulatory challenges have since stalled the merger). Even more recently, Grab announced a collaboration with WeRide to support Grab’s Ai.R (which stands for Autonomously Intelligent Rides), the company’s first autonomous ride service for consumers in Singapore, with an expected launch in 2026. With inflation making many of Grab’s customers more price sensitive, the firm has placed emphasis on rolling out more affordable services, and it’s also aiming to scale up its financial services business, which was highlighted in Q2, as total loan disbursals across GrabFin and its digital banks reached about $3 billion on an annualized, run-rate basis. Overall in the quarter, revenue of $819 million was up 23% year-on-year, with per-share earnings of a penny in line with estimates; the company has been operating just above breakeven, though Wall Street sees gradual improvement in the bottom line along with several consecutive quarters of 20%-ish top-line growth expected.

Technical Analysis
GRAB collapsed during the 2022 bear market and then mostly flatlined during the past few years, with shares sitting near 3 last summer. (Despite the low price, the stock is very liquid and well sponsored, with over 1,000 funds owning shares.) The stock then came alive, with a spike into the mid-5s by November … but it eventually fell right back with a big correction into the April market bottom and, after a recovery, another flat period to Labor Day. But now GRAB has broken out, with two straight big-volume buy weeks last month and a controlled pullback during the past couple of weeks. We’re OK entering around here as the stock tries to resume its upmove.

Weekly Chart

Daily Chart

Stock 5

MongoDB (MDB)

Why the Strength
MongoDB offers cutting-edge enterprise database software that manages cloud-based databases in a way different from traditional data storage approaches. Traditionally, database systems split up data sets for storage then reconstruct them when they need to be accessed, a process that maximizes what used to be costly storage space. MongoDB stores data sets whole, as objects, allowing for faster retrieval in today’s low-cost storage world. It makes for a faster and more flexible platform, which is why today most of the Fortune 500 use MongoDB’s “Atlas” database for their systems. When we featured MongoDB in the September 2 issue, the company was coming off a blockbuster fiscal 2026 Q2 (ending in July) earnings report. In the weeks that have followed, MongoDB executives have been doing a tour of Wall Street investor conferences, emphasizing how they see the explosion of AI as an opportunity for the business, rather than a threat to its software. Mainly, Mongo’s enterprise customers want capabilities for their databases to utilize AI but also want to minimize the potential harm from AI “hallucinations” and unknowability around how it reaches some answers. To address that, Mongo is adding AI-related capabilities to Atlas to make the AI transition easier and safer for its customer base. Unlike seemingly every other business out there, management isn’t saying AI will power the business in the near term, though they see it as a long-term tailwind. Instead, MongoDB’s core business of providing cloud-based database services continues to offer huge revenue opportunities as it seems inevitable every business will shift to cloud infrastructure. Management says fiscal 2026 will see sales growth of 17% with improved net income, too. That has analysts expecting earnings per share of $0.80 this quarter and $0.94 for Q4, on revenue of $593 million and $625 million, respectively. The bigger thing for the stock will be upside surprises—if results crush expectations like they did in August, the stock’s relatively nascent uptrend should have a long way to run as earnings expectations ratchet higher.

Technical Analysis
Last month’s earnings pop in MDB is turning around the long-term downtrend that had been going on for a year and a half or so; the recovery from the April low was decent, but until the gap, shares were still mostly stuck below their 40-week line. Nearly as impressive is the action since the gap—while there’s some old overhead and the overall software sector remains so-so, MDB has traded nice and tight, with next to no selling coming into the stock. If you don’t own any, we think starting a position on a move above last week’s high and a stop under 300 is a solid risk/reward.

Weekly Chart

Daily Chart

Stock 6

Shopify (SHOP) ★ Top Pick ★

Why the Strength
E-commerce software platform giant Shopify (covered in the August 11 issue) is known for helping small, independent and home-based businesses (including those just getting started) create and manage online stores in a single, user-friendly platform. But lately, the company is gaining traction with larger, enterprise-level customers (including more than a few big global brands) through its Shopify Plus offering, allowing it to successfully compete for these high-volume businesses against rivals like Adobe. (The platform is built to handle significant traffic spikes, with the capacity to manage over 10,000 checkouts per minute.) Underscoring its success on this front, Shopify more than doubled its business-to-business gross merchandise volume (GMV) in Q2, which demonstrated what one analyst called “meaningful traction” among enterprise clients. Also accounting for the outfit’s recent growth trends are its expansion efforts in international markets, with Europe showing particular strength, as GMV in that region grew by a whopping 42% year-on-year in Q2. This was a reason cited by a major Wall Street bank last week in its decision to increase its price target for Shopify (one reason for the latest show of strength), pointing to “exceptional execution” in Europe and projecting the firm’s momentum to persist “into the mid-term” as Shopify’s presence is “early” in those markets. The bank also said the firm’s market leadership could help it benefit from the wave of AI in consumer settings—indeed, Shopify just announced a partnership with OpenAI to launch Instant Checkout in ChatGPT, allowing shoppers to seamlessly discover and check out items based on a particular search (another reason for the stock’s strength). The new technology will further allow Shopify’s merchants to sell directly through ChatGPT conversations without links or redirects. In Q2, the company boasted strength across both large and small customers, led by an “acceleration” across the U.S. and Europe, with revenue of $2.7 billion increasing 31% from a year ago and earnings of 35 cents a share up 35%. Analysts see several quarters of 25%-ish revenue growth ahead, along with a meaningful lift in earnings. The Q3 report is due November 6.

Technical Analysis
SHOP built a reasonable base before and after the market’s plunge this year, and the move to new highs near 160 following earnings in early August looked like the real deal. But like so many names, the stock saw selling on strength, with shares pulling back to their 10-week line and, after another test of 160 last month, it dipped for a second test of the 10-week. But now SHOP has pushed to new highs on excellent volume in the past couple of sessions—we can’t rule out some selling on strength, but it looks like a new run is beginning. You can buy some around here or (preferably) on dips, with a stop under 145.

Weekly Chart

Daily Chart

Stock 7

Snowflake (SNOW)

Why the Strength
Snowflake has had a good story (essentially an emerging blue chip in the “big data” space) and very good numbers for years, but frankly, the stock has been (mostly) stuck in the mud for years, with the big valuation and other worries holding it back. But now perception may be ready to pick up, as the firm is becoming a key software cog in the AI boom—AI models and applications need lightning-fast access to reliable data, and this company’s platform (Snowflake calls it the AI Data Cloud) is perfect for it. Indeed, the platform is used by tons of large companies (751 of the Fortune 2000 are customers; 654 pay Snowflake at least $1 million per year) due to its flexibility (can use any type or format of data, including semi-structured data, which is big for AI workloads), security and ease of use (everything hosted online and in one location; no need to shift data into separate systems; computing power automatically ramps up or down depending on a client’s needs; etc.). Revenues here are generally based on consumption (not subscriptions), which customers also like, but is likely to only increase as the need for data mining does the same. Product growth has been rapid and reliable for many quarters and remains so today—the 32% top-line growth seen in fiscal Q2 (ending in July) was the fastest since the April 2024 quarter, while remaining performance obligations (money under contract due in the future) totaled $6.9 billion, up 33%, and same-customer revenue growth was a solid 25%. Elevated investment is one thing holding free cash flow growth back a bit, but that metric is still expected to increase in the low-20% range this year and, the actual numbers are big (likely $3.20 per share or so this year, much larger than reported earnings). To be fair, analysts do see growth slowing ahead, but Snowflake usually tops estimates. It’s a good story, and if the stock can break out (see more below), we think it can run.

Technical Analysis
SNOW is one of many stocks that snapped back beautifully in the weeks after the April market bottom—in this case, the stock rallied nine of 10 weeks to 14-month highs by late May. But then came the chop: Shares topped out near 230 a few weeks later and then cracked the 50-day line in early August … then gapped up on earnings again … before moving sideways for the past month-plus. Still, SNOW has respected support during the recent rest and is beginning to perk up—if you want to wait for a breakout above 250, you can, but officially, we’ll look to nibble in this area and potentially average up if all goes well.

Weekly Chart

Daily Chart

Stock 8

SSR Mining (SSRM)

Why the Strength
After lagging its “sister” metal gold for the better part of a year, silver prices have exploded in recent months, driven by a mix of factors ranging from lower interest rate expectations and geopolitical uncertainties to excellent valuation (with silver being far less costly versus gold on a relative basis). With gold at record highs and silver nearing them as well, the market favors firms that can produce both metals at attractive costs, like SSR Mining. Among its extensive mining properties, the Colorado-based outfit’s Puna operations in Argentina rank among the nation’s largest silver producers, with output of tens of millions of silver ounces annually, with additional mining of zinc and lead. However, while the company’s historical focus has been on silver, it has gravitated more toward gold in recent years, with a pipeline of high-quality development and exploration assets in the U.S., Turkey, Mexico, Peru and Canada. SSR acquired the Cripple Creek & Victor Gold Mine from Newmont earlier this year, a move designed to significantly increase its gold production; combined with its Marigold Mine in Nevada, the company now ranks as the third-largest gold producer in the U.S., with annual production across the two mines expected to average around 350,000 ounces of gold. Most important, higher pricing is now filtering through to results: Total revenue in Q2 of $405 million surged 119% from a year ago, with earnings of 51 cents a share beating estimates by 29 cents. SSR produced 120,191 gold equivalent ounces at a cost of sales of around $1,400 per payable ounce, with all-in sustaining costs (AISC, a key metric) of $2,068 per ounce—37% below the quarter’s average gold price—with record prices significantly contributing to the firm’s profitability. Additionally, SSR generated nearly $100 million in free cash flow in Q2 2025, a sharp turnaround from a $116 million outflow in the same quarter last year (which was largely driven by a catastrophic incident at its Çöpler mine in Turkey). Going forward, the top brass said it has several “meaningful catalysts remaining on the horizon,” with expectations for production to pick up in the second half at its large Marigold gold mine in Nevada, with Q4 planned as the strongest production quarter. Analysts see earnings booming for many quarters to come.

Technical Analysis
SSRM’s rise has largely mirrored that of the gold and silver mining sector, with shares rallying strongly beginning last December and picking up steam heading into the year before peaking in early spring. Shares did make a recovery high a few weeks later, but net-net, the stock didn’t do much from that point until August, but then SSRM completely changed character, with a straight-up run on great volume over eight weeks before a recent pullback—we’ll aim to enter on further weakness.

Weekly Chart

Daily Chart

Stock 9

Vertiv Holdings (VRT)

Why the Strength
Vertiv has been a specialist in computer cooling systems since World War II, an area the company remains a leader in today. Vertiv also has complementary products for mission-critical technological infrastructure, such as uninterruptible power supplies and racks and enclosures for servers. The data center boom caused by AI presents a strong, long-term opportunity for Vertiv, especially for its liquid cooling systems, which is where the industry is shifting toward since it’s more effective for quickly removing heat from high-powered chipsets. Management says about one-third of the total addressable market for data center cooling will go to liquid solutions, since some component of air cooling and heat dissipation systems will always be needed to work in tandem with liquid systems. While it’s tough to estimate how big data center cooling will be in five or 10 years, Vertiv is partnering with AI-chip leader NVIDIA and every hyperscaler in planning out future facilities and designs, so Vertiv is effectively helping define the market for its products in the years to come. In the current market, Vertiv is seeing strong demand for its ancillary products, given increasing need for effective use of space in data centers; the recent acquisition of Great Lakes, a business that does custom racks and cable systems for data centers, should boost sales as well, especially since Great Lakes has a specialty in AI infrastructure. The overall picture is a business growing quickly, with sales growth actually accelerating of late while margins expand. Management expects revenue to be up 24% on the year, to $10 billion, with full-year earnings per share rising 33%, to $3.80, and 2026 looks like another strong growth year, with analysts seeing earnings up 25% (likely conservative). This remains a solid story.

Technical Analysis
VRT had a monstrous run in 2023 and 2024, but it hasn’t been a real leader so far this year, with a steady comeback from the depths of the February-April selloff, but it had failed to hit new highs like many AI infrastructure peers this summer. However, after testing its old highs (and round-number resistance near 150) in late July, VRT went on to build a shallower, more proper structure, and after one more wobble in September, shares broke out on the upside last week. We’ll aim to enter on a bit of a pullback.

Weekly Chart

Daily Chart

Stock 10

Wayfair (W)

Why the Strength
Wayfair is a huge online home goods (furniture, accessories, etc.) seller, cranking out around $12 billion of revenue over the past year by selling everything from cheap to luxury offerings to over 21 million active customers—but even that is a drop in the bucket of the $500 billion furniture industry in the U.S., Canada and the U.K. (The vast majority of revenue is domestic but about 12% is now outside the U.S.) That said, after a pandemic boom, the last couple of years were rough, with business shrinking and the bottom line plunging back into the red—but now the firm has branched out into some new areas (its luxury offerings have grown at a 40% annual rate in recent years; its professional business has over a million customers) while also moving into the brick-and-mortar world (10 locations across all its brands with more on the way, including some large-format stores that will feature tons of inventory) and tightening its belt; the firm’s costs for SG&A and technology have fallen in a big way during the past couple of years, for instance. And that means that, even with single-digit sales growth, most profitability metrics are picking up nicely. In Q2, the company saw adjusted revenue up 6% (adjusted for the exit from Germany) while EBITDA boomed 26% and free cash flow came in north of $1.70 per share (also up about 26%), well ahead of reported earnings. To be fair, analysts expect continued slow top-line growth, and at some point, the margin story won’t have a lot of meat left on the bone, but given the size of Wayfair’s recent beats, it’s likely current outlooks are conservative. The company’s next big update will come on October 28, when Q3 results will be released; analysts are looking for 4% sales growth and earnings of 43 cents per share.

Technical Analysis
During the past few years, W had the occasional run of a few weeks, but for the most part, it was a dog, and the stock knifed to new multi-year lows in April. But the run from there has been both terrific and persistent, driving the stock to two-year highs with only modest dips along the way. More recently, shares have tightened up for a month on light volume as the 50-day line catches up—we’ll set our buy range up from here, looking to enter on a resumption of the rally, with a stop near 80.

Weekly Chart

Daily Chart

Previously Recommended Stocks

The next Cabot Top Ten Trader issue will be published on October 13, 2025.

Copyright © 2025. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.