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We’re adding a pure-play security solutions provider to Cabot Small-Cap Confidential to increase our security software exposure. This company is growing revenue well over 20% and is expanding its portfolio of solutions to address large and rapidly growing markets.

The market has hung in there during the past couple of weeks, which is good to see, but there hasn’t been enough strength — from the major indexes or from growth stocks — to tell us the buyers have retaken control. At the same time, nothing has changed with the big picture, either, which leaves us with the same thoughts we had two weeks ago: Right now, it’s best to be cautious as the correction plays out and as earnings season goes along, but you want to be prepared to move when the tide turns back up.

For our part, we’re holding a good chunk of cash and standing pat tonight, but we have an expanded watch list as we monitor earnings season for signs of future leadership.

Chaos was the overriding theme of the first half of 2025. But for all the pearl-clutching over tariffs, Middle East conflict, slowing economic growth and still-high interest rates, the S&P 500 was up 5% and has risen to new all-time highs. Stocks have truly climbed the proverbial “Wall of Worry.” Will they continue to? I wouldn’t bet against it. So today, we add a once-great large-cap tech stock name that may finally be ready to dig out of a years-long funk. Clif Droke identified it as a prime turnaround candidate in his Cabot Turnaround Letter. Now, we add it to the Stock of the Week portfolio.

Details inside.

Explorer stocks had a good week led by Super Micro (SMCI) up 20% and Cloudflare (NET), up 9%, as PayPal (PYPL) has struggled a bit as it launches a new, higher-margin digital ad business. The S&P 500 is up 14% so far this year but the 10 biggest stocks recently represented almost 37% of the index’s total value, the highest since September 2000, according to FactSet. Use caution and take partial profits if you have some of these in your portfolio.

We have been discussing some great companies and breakthrough technologies, but it is easy to overlook that energy is the foundation of economic and technological development. It is also at the core of how countries secure and project national power.

So today, we add a U.S. renewable energy company that is a leader in an alternative energy source that’s making a comeback.

This has been a week for the history books with record-breaking volatility and uncertainty.

My advice? Stay on the conservative side, leaning to blue-chip dominating stocks not tied to U.S.-China trade. Buy more gold. Since early 2022, gold has strongly outperformed inflation-protected Treasurys, so gold is now the world’s preferred safe-haven asset by many investors.

The President Trump reversal yesterday as Treasury bond market yields jumped and the U.S. dollar fell sent markets soaring. The U.S. raised China tariffs and China responded in kind. Unfortunately, both sides remain on a collision course.

Long experience has taught me that the number-one thing subscribers want from Cabot is stock tips. They want the name of the next Apple (AAPL), the next Netflix (NFLX), the next Amazon (AMZN). But what I’ve discovered is that many people, even when presented the right stocks, don’t know how to handle those stocks properly. So today it’s back to basics. Today, I’m presenting five ways to increase your profits and reduce your risk.

Selling in November, especially in leading growth stocks, hit the Magnificent 7 hard, but the best of the bunch—the Dynamic Duo—are hitting all-time highs.

We’re still playing the seesaw game in the markets—up, down, up, down, etc. I don’t see any need for excess worry; just a little caution that we buy the right stocks. I’m still very long-term bullish, and why not?

The economy continues to strengthen; 79% of the companies in the S&P 500 Index reported positive earnings surprises for the second quarter, and the third quarter looks even better; home building continues to be strong, although low inventory levels continue to pressure resales. Home prices appear to be stabilizing, and employment remains strong.

The soothsayers seem to think that the Fed will keep rates steady at its next meeting, and the probability of a recession has fallen to 16%. What’s not to like?

Inflation cooled for the second straight month in May, the U.S. labor market seems back to pre-pandemic levels, and the economy is expanding at a low but steady pace.

Therefore, the Fed is holding back on interest rate cuts. Probably the right move. Keep the ammo dry for when it is really needed. This was a solid week for Explorer stocks with all making gains except for a small pullback in Super Micro (SCMI).

This morning, from Normandy to Washington, D.C., there will be ceremonies honoring the 80th anniversary of D-Day. Now, we are amidst a different type of struggle, and semiconductor chips are at the heart of it all. And today’s new Explorer recommendation is one of the more important cogs in that global struggle.

Inflation appears stuck at a much higher level than acceptable for the Federal Reserve so lower interest rates are on pause. Gold is one beneficiary.

This means that some high-flyer tech stocks may be vulnerable. Meanwhile, Japanese stocks remain near all-time highs.

Fortunately, we have exposure to both gold and Japan in the Explorer portfolio, and today we add to that exposure.

Five of the Magnificent Seven stocks—Alphabet, Microsoft, Meta, Amazon and Apple—report earnings this week. Here’s what to watch for.

*Note: Your next issue of Cabot Options Trader Pro will arrive next Tuesday, May 27 due to the market holiday next Monday, May 26 in observance of Memorial Day.

Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.

*Note: Your next issue of Cabot Options Trader will arrive next Tuesday, May 27 due to the market holiday next Monday, May 26 in observance of Memorial Day.

Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.

Cabot Analysts have once again been included in the Money Show’s Top Picks Report, an annual report from some of the brightest analysts on Wall Street. Here’s a selection.

It’s been a challenging week for growth investors as the stocks that climbed the fastest are getting hit the hardest, such as our Cloudflare (NET) position, despite still posting strong numbers. On the other hand, Oracle (ORCL), where expectations are more modest, jumped from 89 to 104 this week on earnings that beat expectations.

There is one topic that brings together Wall Street, Hollywood and Silicon Valley – the metaverse. While “metaverse” definitions are varied, the idea of bringing people together in a virtual interactive world is, as they used to say, the talk of the town.

The market has entered a rough patch, especially for tech and stocks that have not been demonstrating relative strength. Explorer stocks are all over the map, with Coupa (COUP) and Cloudflare (NET) showing some weakness, many positions holding steady, and Novonix (NVNXF) up 25% in the last week.