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January 31, 2025

January has lived up to its reputation in 2025, with plenty of volatility, cross-currents and news-driven moves, highlighted by this week’s huge AI infrastructure selloff and partial recovery while the broad market improved.

January has lived up to its reputation in 2025, with plenty of volatility, cross-currents and news-driven moves, highlighted by this week’s huge AI infrastructure selloff and partial recovery while the broad market improved.

We’ll talk about those AI stocks in a minute, but starting with the top-down evidence, it’s mostly neutral at this point—the vast majority of indexes and growth-ier measures have been hacking sideways since mid-to-late December. To be fair, the broad market has improved (new lows are tame, etc.), and we would say overall there’s more good than bad—but in the intermediate term, at least, there aren’t a lot of true uptrends.

Individual stocks are also mixed, though again, we do see some encouraging action—non-AI infrastructure growth names (software and cybersecurity in particular) actually perked up this week, which is something to watch. That said, many names working have tended to be slower or stodgier outfits, and we’re still seeing a lot of names struggle with prior resistance levels.

As for those AI stocks, which obviously are of big interest, my general thoughts are that there’s probably a one-quarter chance (ballpark) that Monday was some sort of clear-the-decks shakeout, and the group will basically march higher from here as the CapEx spending plans remain solid. However, odds-wise, there’s a better chance the group is going to need time to repair the damage, with some names likely fading further while other spend at least a few weeks to base out.

We’ll be watching the stocks closely and seeing which are tennis balls (bouncing nicely) versus those that are eggs (that splatter on the floor). So far, while not at solid entry points, the power-related names (utilities and infrastructure) have bounced very nicely, though the chips and connectivity players have been more muted. If you happen to still own any AI stocks in general, it’s fine to hold, but use a stop near the recent lows—if all’s well they should generally hold and advance going forward.

Back to the overall market, we’re going to leave our Market Monitor at a level 6 today, but if things look like this on Monday afternoon—meaning the market has held and snapped back nicely following the AI earthquake—we’ll likely bump it up a notch while we home in on fresher leaders and earnings winners. All in all, we’re optimistic but continue to want to see more growthy names emerge on the upside.

SUGGESTED BUYS

Warby Parker (WRBY) broke out in early November and had a great run before it started to chop around in December and January, testing its 10-week line—but this week it lifted off that support area on good volume. If you don’t own any, we’re OK nibbling here or (preferably) on dips of a few dimes with a stop near 25.

SUGGESTED SELLS

Partial Sells

Cloudflare (NET) was one of the software (and, loosely, cybersecurity) plays that zoomed earlier this week as the AI stocks got hit, giving us a decent, quick profit. You can consider letting some go up here with a stop around your cost for the rest.

Full Sells

None today, though this comes after a handful on Monday’s selloff.

SUGGESTED STOPS

Alaska Air (ALK) near 66
Antero Resources (AR) near 36
Birkenstock (BIRK) near 56
Chart Industries (GTLS) near 194
Delta Air Lines (DAL) near 64
DoorDash (DASH) near 171
EQT Corp (EQT) near 48
Expand Energy (EXE) near 99
Howmet Aerospace (HWM) near 116
Penumbra (PEN) near 250
Reddit (RDDT) near 155
RH Inc (RH) near 405
Rubrik (RBRK) near 61.5
Semtech (SMTC) near 59
Twilio (TWLO) near 125
Urban Outfitters (URBN) near 53
Warby Parker (WRBY) near 25
Wix.com (WIX) near 220


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A growth stock and market timing expert, Michael Cintolo is Chief Investment Strategist of Cabot Wealth Network and Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides, which has helped Cabot place among the top handful of market-timing newsletters numerous times.