By Michael Cintolo, Vice President of Investments, Cabot Wealth Network
Advanced Micro Devices (AMD)
High-performance CPUs and GPUs provided by Advanced Micro Devices have been described by analysts as “indispensable assets” for AI infrastructure growth, which is a big part of the company’s growth story for the next few years. Indeed, at a recent industry conference, the top brass noted that agentic AI continues to fuel growth, with momentum from training and inference for AI models (which can increase sales for AMD’s server CPUs), along with ongoing AI adoption, experimentation and “more adoption at scale” pushing “very significant and incremental demand” for the firm’s EPYC CPU platform (currently in the fifth generation) as enterprises move from experimentation to large-scale deployment. On that front, the company also pointed out that the CPU business grew over 50% year-on-year in Q1, with eye-opening 70% growth expected in Q2. Advanced Micro is further seeing a growing number of AI-related contract wins for its Instinct GPUs, including long-term partnerships with OpenAI and Meta (valued at over $100 billion, and for which the company sees the year-ahead forecast above its original plan), plus an expansion of its partnership with Oracle for an AI supercluster powered by Advanced Micro’s next-generation Instinct MI450 GPUs. Additionally, the outfit is gaining traction with Microsoft (co-engineering custom silicon for next-gen Xbox consoles and accelerating onboard AI for Windows) and SpaceX subsidiary xAI (for deploying Instinct MI300 AI chips for its massive, one-million GPU data center in Tennessee). On the financial front, the numbers here are excellent and set to get even better: Q1 revenue of $10.3 billion increased 38% from a year ago, with earnings of $1.37 a share beating estimates by eight cents, and looking ahead, Advanced Micro expects server growth to “accelerate meaningfully” as it scales supply to meet demand and sees “strengthening interest” in its MI450 AI accelerator and Helios rack-scale AI offerings, with volume shipments and large-scale deployments for both expected later this year. Analysts see the bottom line up nearly 80% this year and next, with $20 of earnings likely sometime near 2029. The stock was one of the strongest names in the entire market coming out of the late-March bottom, but despite rising more than 150% right quick, the stock has refused to give back any gains, even as AI stocks wobbled in early and late June. We think the huge earnings outlook (which could be conservative) and the stock’s action mean higher prices are likely.
Hinge Health (HNGE)
Hinge Health is a small firm with a very big story: The company is the leading player in virtual physical therapy, allowing those with covered health plans to access its popular musculoskeletal (MSK) offering, which goes far beyond a standard exercise video—patients line up their phone or tablet while doing specific exercises, with Hinge’s AI-powered technology (dubbed TruMotion) providing real-time feedback and tracking, and they also have access to both health coaches and physicians, too. There’s also Enso, a wearable pod that uses electrical impulses to help with any pain during exercise to help patients get through their routine. The biggest factor here is that it works and saves employers and insurers a ton of money, with a comprehensive study showing 60%-plus reductions in injections and surgeries, saving nearly $3,000 in medical costs per year, per patient! (Hinge sells it solely through businesses that offer it as a covered benefit, with 23% growth in Q1 in that client base and a retention rate of 97%.) There is competition, but Hinge has a solid moat, both via technology (it’s served over two million people at this point, which adds to its database; AI advancements only help the cause here) and its distribution (60-plus health plans, more than 2,800 corporate clients plus deals with various pharmacies and such); the fact that it’s the #1 rated musculoskeletal app is a good thing, too. Going forward, the firm is set to use Enso as a treatment for migraines, with patients wearing it for an hour after an episode; 125 corporate clients have already signed on, with the top brass thinking it will contribute in a big way to the top line in 2027. As for the here and now, business is very good: In Q1, sales boomed 47% and bookings over the past year were up 52%, with earnings solidly in the ($2.60 per share expected this year) and free cash flow looking great, too. Shares built a big 10-month post-IPO base, but HNGE catapulted out of that base near the end of May and showed great follow-through last month. It’s a bit extended heading into July, but the first pullback or rest period should prove buyable.
Palo Alto Networks (PANW)
Runaway growth in AI is creating new cyberattack vulnerabilities while making cyber threats more sophisticated, resulting in higher spend among enterprises to protect AI models and agents, cloud workloads and identities. This is the chief reason for the strength behind Palo Alto, which provides a comprehensive cybersecurity platform, offering integrated solutions across network, cloud, identity and AI security. The company also boasts a particularly strong presence in hybrid-cloud, multi-cloud and remote work environments. As large companies are increasingly looking to reduce vendor complexity and consolidate networking, security and threat detection on a single framework, Palo Alto sees a major opportunity in what industry analysts are calling “platformization,” or the replacement of several standalone security tools with a single integrated platform. And as AI transitions from experimental stages to enterprise-wide production, management is reporting strong adoption of AI security in recent quarters, which is likely just the tip of the iceberg. In its fiscal third quarter (ending in April), Palo Alto secured 110 new platformizations, including 20 from its integrations of CyberArk (for identifying who is accessing the user’s system) and Chronosphere (showing what’s happening inside the environment), two recent acquisitions, and ending the quarter with roughly 2,280 total platformized customers, which the firm said allows it to “reach into large addressable markets within identify and observability.” Q3 revenue of $3 billion increased 31% year-on-year, with free cash flow booming 57% to $910 million, or north of $1.10 per share. Annual recurring revenue (ARR) of $8.1 billion grew by a whopping 60%, while remaining performance obligations (RPOs) rose 36%, to $18.4 billion, including $1.8 billion from CyberArk and Chronosphere. Moving forward, Palo Alto said it’s “confident” in surpassing a whopping 4,000 platformizations by fiscal 2030, supporting its $20 billion revenue target for next-generation security ARR. Analysts see 30%-ish top-line growth in each of the next three quarters. As for the stock, it decisively changed character in May and soared to new highs a few weeks later, and after a quick shakeout, has returned to its highs. After no net progress for the prior two years, we think a major uptrend has begun.
TG Therapeutics (TGTX)
We’ve been keeping an eye on TG Therapeutics for more than a year, and now, after a year-long consolidation, it’s looking ready to join a handful of biotech names in leadership positions. TG’s claim to fame is Briumvi, which is a treatment for relapsing multiple sclerosis, an industry that’s huge and also transitioning from some older, less effective medications to anti-CD20 drugs, named because it destroys B-cells that are attacking nerves—while leaving stem cells and the rest of the immune system unharmed. Right now, there are two other big CD20 offerings (Roche has the biggest one, but Novartis is eating into it; combined they bring in more than $10 billion in annual revenue, and that figure is growing), but Briumvi is seeing a huge uptake for a few reasons: First and foremost, its results in trials (and now real life) are as good as if not better than the competition; second, it has an easier dosing schedule compared to Roche’s offering (one-hour infusion every six months after the initial dosing), which is better for patients and infusion centers, with a likely 2027 launch of an even less intense initial dosing sure to help; and third, the total cost is generally cheaper (by 10% or so), which is obviously a pull. Moreover, the firm expects Phase III trial data for a subcutaneous version of the Briumvi late this year or early next, which would make home injections by the patient possible in 2028, putting it in direct competition with the other big competing drug from Novartis, boosting its potential market by more than 50%! Growth has been terrific, with Briumvi sales totaling $195 million in Q1, up 63%, with management now thinking nearly $900 million is coming for the drug this year (its fourth since launch); just from taking share from older treatments, Briumvi is likely to keep growing (sales expected to rise 32% next year, likely conservative), and improving dosing and subcutaneous offerings would dramatically boost its potential from there. As for the stock, TGTX topped last February, built a huge launching pad, and then broke out decisively last month. It looks like a mid-cap leader of the fresh upturn in biotech and medical stocks.
Victoria’s Secret (VSXY)
Victoria’s Secret has long been one of the best-known brands in the intimates retail category, but it’s been a major underperformer, with increasing competition and a series of iffy decisions by management (overextended into brick-and-mortar locations, product lineup got stale, etc.) leading to lackluster performance. But now the firm looks like a solid turnaround play: From sharpening the distinction between its two main brands (including PINK, targeting a younger demographic, in bras, apparel, swim gear and more; its seen seven straight quarters of growth), emphasizing higher-margin beauty products (low double digit growth in Q1), cutting back on promotions (also boosting margins), playing more into e-commerce (31% of sales are online in North America) and fresh store redesigns, the top brass has pulled the right levers to get business on track. Q1 results blew away expectations, with sales growth of 15% the fastest in years, with earnings of 60 cents more than double what the company forecast, driven by broad-based strength across product lines and much higher margins as costs remained in check (operating margin of 5.1%, vs 2.3% a year ago). Obviously, no one is claiming Victoria’s Secret is suddenly a major growth story (sales are expected to rise 9% this year and 4% next), but this is a top-notch brand with a lot of earnings power if management continues to make the right moves—the way these things work, it’s likely even the big earnings estimates for this year and next will prove very conservative. Shares have been the dog’s dinner for some time, but after a solid run in the second half of 2025, they gapped up strongly in early June and are now hitting all-time highs.
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About Cabot Wealth Network
This report is published by Cabot Wealth Network which was founded in 1970 by Carlton Lutts, a disciplined investor with an engineering mind who developed a proprietary stock picking system using technical and fundamental analyses.
Since then Cabot Wealth Network, headquartered in Salem, Massachusetts, has grown to become one of the largest and most-trusted independent investment advisory publishers in the country, serving hundreds of thousands of investors across North America and around the world.
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