Category Penny Stocks

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Stock Grader recommendations for 125 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

Article printed from InvestorPlace Media, https://investorplace.com/market360/2025/05/20250525-blue-chip-upgrades-downgrades/.

©2025 InvestorPlace Media, LLC

Sometimes, the stock market whispers. Other times, it shouts. And right now, we’re confident that the market is screaming: It’s time to buy stocks. 

If you’re skeptical, we completely understand. After all, just last month, Wall Street endured one of its fastest and most violent crashes ever.

In early April, stocks plummeted 10% in just two days – something that’s only happened five other times in the past 100 years, all during moments of crisis like the Great Depression, Black Monday, and 2008’s Great Recession. As a matter of fact, up until last week, stocks were tracking for their third-worst year on record after dropping more than 12% in the first 74 trading days…

But then came the biggest comeback rally in the past 100 years.

Signs that the global trade war is rapidly deescalating blew strong winds into Wall Street’s sails – and sparked a historic rally. The S&P 500 has now posted gains in nine consecutive sessions, rising more than 10% over that stretch. This marks the index’s biggest nine-day winning streak since the 1920s. 

One of the stock market’s most violent crashes of all time has turned into one of its biggest comeback rallies of all time. 

And while many investors are still reeling from the recent crash, we’re seeing signs of opportunity – especially in a very specific corner of the stock market: artificial intelligence. As trade tensions cool and the Fed pivots, we believe a select group of AI stocks could lead the next leg of this rally.

And we think this comeback could last. In fact, we have reason to believe it’ll heat up over the next few months – and evolve into a massive summer buying panic… 

May: Trade Deals Clear the Way for a Stock Market Breakout

Let’s start with May, the month we expect the “trade dam” to break.

It seems that the pressure that’s been building since “Liberation Day” is finally forcing a breakthrough on the trade front. 

Over the past week, multiple White House officials have suggested that several trade deals are nearly complete – especially with key allies like India, Japan, South Korea, and Vietnam. 

We think those deals will be announced in May. 

And they’ll likely do more than just ease tariffs. They’ll slam the brakes on inflation fears, cool the geopolitical heat, and finally give the Federal Reserve the economic clarity it’s been waiting for.

1. Less Uncertainty, Clearer Policy Moves. Trade tensions muddy the waters for consumers, businesses, and investors alike. Finalized trade deals remove a major wildcard, making it easier for the Fed to assess the broader economy and chart a clearer path for interest rates.
2. Sharper Read on Inflation. Tariffs and trade disruptions affect prices, both directly (via imported goods) and indirectly (via supply chains). With trade terms nailed down, the Fed can better separate temporary price spikes from lasting inflation pressures.
3. Unlocking Business Investment. When trade policy is up in the air, businesses tend to hold off on spending. Trade clarity helps unlock that investment, giving the Fed stronger signals about economic momentum and making it easier to project GDP growth and adjust monetary policy accordingly.
4. A Clearer Global Picture. Trade deals don’t just impact the U.S. – they ripple across global markets. With more stability abroad, the Fed can better judge how international trends might affect U.S. growth.

This transparency should trigger the next domino: a strong signal from the Fed that a rate cut is coming in June. Pair that with declining bond yields, and you’ve got the perfect environment for risk assets to run higher. 

Editor’s Note: April didn’t bring the kind of market performance we’ve come to expect. Instead of historical gains, investors were met with headwinds: tariff battles, inflation concerns, and political uncertainty.

But just like the saying goes, April showers bring May flowers.

However, as the old saying goes, with April showers come May flowers. And I think there will be some very beautiful flowers in the market in May, especially from my Growth Investor stocks. So, I want to talk about a few green shoots that are already emerging in the market.

Green Shoot #1: Thawing Tariff Tensions

As you know, the trade war between China and the U.S. escalated in early April.

China turned up the pressure by banning all rare earth exports to the U.S., which included rare earth magnets. This ban will hinder the electric vehicle (EV), technology, aerospace and defense industries. China also halted deliveries of Boeing Co. (BA) jets, with 10 new 737 Max jets grounded before they could be shipped to three Chinese airlines.

The Trump administration responded in kind, banning NVIDIA Corporation (NVDA) from delivering its H20 GPUs to China. The H20 chip was specifically developed for China after the Biden administration placed restrictions on AI chip shipments.

However, Treasury Secretary Scott Bessent recently told attendees at a closed-door investor summit that the tariff standoff with China cannot be sustained by both sides. He noted that the world’s two largest economies will have to find ways to de-escalate tensions – and this de-escalation will come soon.

Well, during a press conference, President Trump noted that the final tariffs on China will be a lot lower than current levels. He even added that if China and the U.S. cannot come to an agreement on tariffs, he may still lower key tariffs. Trump predicted that the final tariff on China would not be “anywhere near” the 145% level, and he added that “we’re going to be very nice” in negotiations.

I should also add that the U.K., the European Union (EU) and about 130 countries are all negotiating new trade agreements with the U.S. – and that should remove most trade barriers.

So, freer trade should be the end result.

Green Shoot #2: Powell’s Job Is Secure… for now

Given that the Federal Reserve has sat on its hands this year, President Trump’s frustration was on display recently – and that ignited fears that Fed Chair Jerome Powell’s job was in jeopardy.

Powell appeared before the Economic Club of Chicago, where he said that there is a “strong likelihood” that Americans will face higher prices, and the U.S. economy will see higher unemployment due to tariffs. He continued saying that this environment would create a “challenging scenario” for the Fed because any adjustments to interest rates to address inflationary pressures could worsen unemployment and vice versa.

Powell concluded, “It’s a difficult place for a central bank to be, in terms of what to do.”

Clearly, the Fed and Powell remain concerned about inflation. But the reality is consumer and wholesale inflation both declined in March. Also, deflation has actually arrived in the wake of the lowest crude oil prices in four years.

So, the Fed, Powell and even our allies are needlessly worried about inflation.

It’s clear that Powell is not an economist, and that’s why President Trump responded on Truth Social, stating that “Powell’s termination can’t come quickly enough.” You may recall that Powell’s term as Fed Chair will expire in 2026. But there were concerns that President Trump could fire him, and that’s one of the reasons why the stock market was in a tizzy on Monday.

Thankfully, Trump quelled these fears in a press conference on Tuesday, where he stated that he has “no intention” of firing Powell.

It’s clear that Trump is frustrated that the Fed has not cut key interest rates this year, and he will likely blame the Fed and Powell if there is a recession. But for now, it looks like Powell will finish out his term as Fed Chair.

Green Shoot #3: Earnings Are Working

Now, the biggest green shoot is earnings.

The early quarterly earnings announcements are always the best, and that’s certainly been the case so far. Of the S&P 500 companies that have reported so far, 71% have exceeded analysts’ earnings estimates, posting an average 6.1% earnings surprise. FactSet now anticipates that the S&P 500 will achieve at least 7.2% average earnings growth for the first quarter.

But what really has me excited is the fact that early results have shown “earnings are working.” In other words, when a company with superior fundamentals beats analysts’ expectations, the stock rallies strongly.

Case in point: In Growth Investor, two of our stocks climbed 4% higher and more than 8% higher in the wake of their quarterly earnings beats on Tuesday. Then on Thursday, one of our stocks rallied 4% higher and another one jumped more than 8% after both companies topped analysts’ expectations.

So, we can count on wave after wave of better-than-expected sales and earnings to continue to propel fundamentally superior stocks higher in the upcoming weeks.

Get Ready for May Flowers

With tariff negotiations proceeding well, and tensions thawing between the U.S. and China, I expect trade barriers to continue to fall. And when it becomes clear that oppressive tariffs will not derail the U.S. economy, I look for the positive earnings environment and falling interest rates to serve as an incredible one-two punch that drives fundamentally superior stocks substantially higher.

The bottom line: Spring has now arrived – and it is time to cheer up, folks!

So, the question is… where do you find the best stocks with superior fundamentals?

That’s where my Growth Investor service comes in. 

The fact is the stocks I recommend in this service remain backed by superior fundamentals. And the proof is in the numbers…

Our Buy List stocks are characterized by 24% average annual sales growth and 81.1% average annual earnings growth. That compares to the S&P 500, which is expected to achieve an estimated 4.6% revenue growth and a 7.2% average earnings growth rate for the first quarter.

I should also mention that analysts have increased earnings estimates by an average of 3.8% in the past three months. So, the analyst community remains very positive on these stocks.

To learn more about Growth Investor and gain immediate access to my lates picks, go here now.

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corpforation (NVDA)

Editor’s note: “Explosive Growth Ahead? What the May 7 Market Shift Means for AI Stocks” was previously published with the title “AI Stocks Could Explode After the May 7 Market Shakeup” in April 2025. It has since been updated to include the most relevant information available.

What happens when you mix the most transformational technological megatrend of our lives (AI) with arguably the most ambitious U.S. president we’ve ever seen (Trump)?

You could ignite a $7 trillion Summer Panic in the markets… the sort of surge that we haven’t seen since the 1997 internet boom.

And we think that panic could unfurl as soon as next week, on May 7, when the White House is expected to kickstart an AI acceleration. 

In short, investors are sitting on a record $7 trillion in cash, waiting for the opportunity to jump in. Private equity alone is holding at least $2.62 trillion, according to S&P Global Market Intelligence.

That means we could see an enormous return of this cash to the stock market this summer. 

Because here’s the truth: What we’ve seen in 2025 isn’t the stock market’s first “crash” in recent years.

The 2010 Flash Crash. 2011’s U.S. debt ceiling downgrade, the 2015 yuan devaluation, and 2018’s Fed hike panic. The 2020 Covid crash and ‘22’s inflation meltdown.

All were buying opportunities for those who knew where to look.

In fact, it was during many of the last decade’s stock market crashes that I nailed the rise of the “Magnificent 7” stocks…

Tom Yeung here with your Sunday Digest. 

Last month, I wrote about five stocks to “buy the dip.” Our quantitative systems signaled April’s selloff had gone too far and that low prices would be enough to trigger a market rally. 

Since then, these five firms have performed splendidly, largely outperforming the S&P 500’s 8% rise. 

• Salesforce Inc. (CRM) +16% 
• Akamai Technologies Inc. (AKAM) +13% 
• Advanced Micro Devices Inc. (AMD) +16% 
• Moderna Inc. (MRNA) +6% 
• Celanese Corp. (CE) +13% 

InvestorPlace Senior Analyst Luke Lango believes this is just the start.  

He predicts a major event on May 7 will trigger a flood of cash – as much as $7 trillion – to rush back into U.S. stocks. It’s a catalyst that could change the entire market dynamic and create a new summer “panic” of the sort not seen since 1997. 

This is why he held a special 2025 Summer Panic Summit on Thursday. At this event, Luke explained why he believes this catalyst on May 7 will be a game-changer. Plus, he revealed a new set of stocks that he believes are primed to lead the next wave of growth. (You can watch a replay of the event here.)  

Now, I can’t tell you what this catalyst is. You’ll have to see it for yourself in Luke’s special presentation. But if this panic buying he describes does take off, several of my top long-term picks are certain to benefit.  

Let’s revisit two of them today – and a new one as well… 

The Leveraged Play 

The first is Sabre Corp. (SABR), one of the three firms that run the world’s Global Distribution System (GDS) for hotels and flights. Virtually all travel agents and online booking systems use GDS to book flights since it’s the only platform with real-time data on available seats, rooms, and prices. That means industry profits are generally stable and very high. (Even Alphabet Inc. [GOOGL] failed to create a rival system and now uses Sabre to power Google Flights.) 

That’s why private equity decided to take Sabre off the public markets in 2007. They saw a cash cow that could be loaded with debt to make large profits even bigger. And it worked, at least in the short run.  

Sabre returned to public markets in 2014 with 50% higher net income, and the stock surged another 70% the following year as profits continued to climb. 

Then, two things happened. 

• Covid-19. The once-in-a-century pandemic brought air travel to a near standstill, slashing Sabre’s revenues and making debts impossible to service. 
• Rising rates. The following year, the U.S. Federal Reserve began hiking interest rates to stave off inflation, making it harder for Sabre to pay off existing debts and roll them into new deals. 

That crushed Sabre’s share price, which has fallen 90% since early 2020. Its debts are now worth almost six times more than its equity… a situation usually associated with near-bankrupt companies. 

But if Luke’s calculations are right, things could soon turn around for this equity “stub.” 

In fact, since the company is so financially leveraged, a 10% increase in enterprise value will translate into a 58% increase in share price. 

That makes Sabre an incredible “option-like” play. In the worst case, the stock goes to zero… but in the best case, SABR shares could rise 2X… 5X… or even 10X.  

The Real Estate Kings 

The May 7 catalyst will also be felt among real estate companies that rely on more traditional debt financing. 

My two favorites are on opposite ends of the risk spectrum. I would recommend both as complements. 

• Realty Income Corp. (O). This real estate investment trust (REIT) is arguably the most conservative of its kind. Leases are made on a “triple net” basis, meaning tenants are responsible for almost all costs, and the company attracts blue-chip tenants by offering minimal rent increases. Its dividend is paid monthly and sits at a stunningly high 5.6%. 
• Digital Realty Trust Inc. (DLR). Meanwhile, DLR is one of the most aggressive REITs thanks to its single-minded pursuit of growth in AI data centers. Gross income more than doubled to $2.9 billion in 2024, and analysts expect another 50% surge to $4.5 billion by 2027. Cloud computing firms like Microsoft Corp. (MSFT) are still starved for computing power, and Digital Realty has grown as quickly as possible to service that need. Dividends are lower at 3% to reflect this potential. 

These two firms are well run. Realty Income has played the long game by focusing on grocery stores (10% of its portfolio), convenience stores (9%), non-retail stores  (i.e., industrial and services) (21%), and other businesses resistant to e-commerce competition.  

On its part, Digital Realty realized early on that cloud computing customers would need dense colocation data centers (where powered, connected warehouse space is rented out to firms that bring their own servers) and quickly moved to offer that service. 

That means both firms should see a surge in buying interest on a May 7 catalyst. Despite their differences, these REITs are economically sensitive firms. And if Luke is right, a summer panic could send these types of companies soaring.  

The Healthcare Acquirer 

Finally, I’m adding a new pick to my top list: 

Biogen Inc. (BIIB). 

This high-quality biotech firm was created in 2003 in a mega-merger of Biogen and automation company Idec. Shares rose as much as 1,200% through the biotech boom of the mid-2010s as blockbusters like cancer drug Rituxan and MS therapy Avonex came onto the market. Biogen also proved reasonably adept at acquiring and partnering with other biotech firms, though a 2019 acquisition of Nightstar did end with two clinical failures. 

Challenges began to mount after 2023 on rising research costs and high interest rates. Suddenly, new therapies became far more expensive to finance. A lackluster launch of Alzheimer’s drug Leqembi also spooked investors. So did recent staffing cuts at the U.S. Food and Drug Administration (FDA), which will increase the time and barriers for new drug approvals. 

Biogen’s stock has dropped 60% over the past two years and trades at 8X forward earnings, compared to a long-term average of 13.3X.  

The May 7 catalyst could change part of that equation. 

This summer, we could see investors return to this beat-up stock whose forward price-earnings ratio now looks more like an automaker’s than a top-tier biotech’s. Biogen’s pipeline and several new launches look reasonably strong. Recently approved drugs like Skyclarys, used in neurology, and Zurzuvae, for postpartum depression, should reduce the impact of expiring drugs and Leqembi’s slower-than-expected success.  

It’s also worth noting that large biotechs like Biogen have significant marketing and production scale that make them attractive partners, allowing them to snap up promising smaller firms at a discount. 

Of course, many of Biogen’s challenges will remain. Biotech is an industry that generates enormous paydays and equally significant flops. I’m also not expecting a quick return to “normal” at the FDA. 

Still, if you had told me two years ago that Biogen would be on sale at 8X forward earnings, I wouldn’t have believed you. And now, it’s something worth taking advantage of. 

The Summer Panic of 1997 

In May 1997, the Asian Financial Crisis was getting started. Currency speculators were dumping the Thai baht, forcing that country’s central bank to defend their currency exchange rate with a dwindling supply of foreign reserves. By July, these reserves had run out, triggering a devaluation and market mayhem. It only took several months for the crisis to spread to South Korea, Hong Kong, and beyond. Asian stock markets collapsed. 

Yet, none of this affected the dot-com boom. Over the same period, the tech-heavy Nasdaq Composite surged 20% to a new record as American investors began recognizing the promises of the internet. Retail investors were more panicked about missing out than with some faraway financial crisis. 

Luke Lango believes we’re approaching a new version of this two-sided “panic.” 

Today, bearish institutional investors are dumping tariff-impacted companies as global macro fears kick in. Shares of Norwegian Cruise Line Holdings Ltd. (NCLH) have dropped 38%, while those of shoe retailer Deckers Outdoor Corp. (DECK) have sunk 45%. 

Meanwhile, retail investors are aggressively buying the dip every chance they get. On April 3, individual investors bought $4.7 billion of equities following President Donald Trump’s “Liberation Day” selloff. And on Wednesday, a negative U.S. GDP report was quickly buried as these same mom-and-pop investors snapped up shares. 

That’s because there’s a lot of money sitting on the sidelines. And there are a lot of bullish investors waiting to buy up stock. 

This could come to a head on May 7, when Luke predicts an event will trigger a new cascade of retail buying. 

Understandably, everyone is focused on short-term moves in the midst of a fast-paced market. But there’s something bigger happening behind the scenes…  

For the full breakdown of this catalyst – and Luke’s blueprint for the summer – click here to check out his 2025 Summer Panic Summit.

Until next week, 

Tom Yeung 

Market Analyst, InvestorPlace.com 

The economy is at a tipping point right now. It’s shifting faster and deeper than most investors realize.

Take the situation with tariffs, for example. Whether you’re a fan of President Trump or not, I think we can all agree that the rollout of the tariffs was quite a whirlwind. Things are moving fast, and for many, it’s starting to feel chaotic.

That’s why this week’s reports on GDP, inflation and jobs were so important. They offer the first real clues about what’s brewing beneath the surface.

But I’m here to tell you that a far bigger story is unfolding behind the scenes. And in just a moment, I’ll show you exactly what’s unfolding, and more importantly, what you can do about it.

But first, let’s discuss this week’s important economic data.

The GDP Report’s Hidden Strength

Let’s start with Thursday morning’s gross domestic product report.

At first glance, the headline number looked disappointing. GDP declined at an annualized rate of 0.3% in the first quarter – slightly worse than the 0.2% drop economists expected.

But if you dig a little deeper, the picture is a lot more encouraging.

The decline was largely the result of a 41.3% surge in imports ahead of the new tariff deadlines. That surge alone knocked 4.8% off the GDP number. Essentially, countries and businesses alike were trying to get their goods in before the tariffs hit – and that created a drag on the numbers that doesn’t reflect the true health of the economy.

If you back that out, growth was actually positive. So, the signs of recession aren’t there, folks.

The Fed’s Favorite Inflation Gauge

Next up is the latest look at inflation – the Personal Consumption Expenditures (PCE) index.

Remember, the core component of this report is the Federal Reserve’s preferred inflation gauge. So, it’s worth watching closely.

In March, the headline PCE index was flat month-over-month. That brings the annual rate down to 2.3% – the lowest since last fall. Core PCE, which excludes food and energy prices, also remained flat for the month, with the annual rate falling to 2.6% from 3.0% in February.

Now, economists anticipated a 0.1% monthly increase for both headline and core PCE, with annual rates holding steady or ticking higher. So, this is really encouraging, folks. However, these figures came before the implementation of the tariffs in April.

Jobs Report: Not the “Bad” News I Wanted…

Now let’s turn to the labor market.

The jobs report was released this morning, and to be honest, I was a little disappointed with it.

The U.S. economy added 175,000 jobs in April – beating estimates for 138,000. The unemployment rate held steady at 4.2%. But I was actually hoping for a weaker headline number, because that would help bolster the case for key interest rate cuts.

Specifically, I wanted to see the impact of all the job cuts coming from the Department of Government Efficiency (DOGE). Unfortunately, that didn’t show up. The report only showed a decline of 9,000 federal workers. Whether that’s because of lagging severance packages or something else, the DOGE cuts just didn’t hit the numbers the way I expected.

There were, however, downward revisions to previous months. February and March job gains were revised lower by a combined 58,000. And while payrolls came in hotter than expected, wage growth was soft – average hourly earnings rose just six cents in April.

Sometimes, bad news is good news. And while we didn’t quite get the “bad news” I was hoping for, the reality is the cracks are starting to show.

The Case for Rate Cuts Is Growing

So, the big question is whether these reports will be enough to push the Fed toward cutting rates? That remains to be seen.

On balance, I think the slowing revisions and wage growth in the jobs report help build the case.

And while the PCE report was very encouraging, the issue here is that this data is before the tariffs hit. The Fed is worried that the tariffs could lead to price increases in the coming months. The reality is that the deflationary signs are building, and our dollar is incredibly strong.

So frankly, I think the Fed is being overly cautious here. If I were Fed Chair Jerome Powell, I’d go ahead and cut now.

In fact, I’m predicting four rate cuts this year. That’s more than most economists are calling for, but it lines up with what we’re seeing in the bond market.

In fact, in a recent appearance on Fox Business, Treasury Secretary Scott Bessent pointed out that the two-year Treasury yield (now at about 3.8%) is far below the current federal funds target rate range of 4.25% to 4.50%.

That’s a clear signal the Fed is behind the curve – and that multiple rate cuts may be needed just to catch up to market expectations.

Now, the 10-year Treasury yield has perked up a bit recently. It’s at about 4.3% right now. But the European Central Bank has already cut interest rates seven times since June 2024, bringing its benchmark rate down to 2.25%. And markets are expecting as many as three additional cuts in 2025, starting in June.

So, I expect our Treasury yields to continue meandering lower as global rates decline. Soon, they’ll be well below the federal funds rate, and the Fed be out of sync with the broader market. Then, it will have to cut.

Closing Thoughts

When that happens, it could be just the rocket fuel the market needs.

The fact is, I expect positive trade developments, upcoming key interest rate cuts and strong quarterly results should serve as the powerful “one-two-three” punch that propels fundamentally superior stocks much higher.

But I should add that one thing is clear amid all of the uncertainty right now, folks.

The market is adjusting to a new reality.

The fact is, we are in a period of dramatic upheaval, and it’s only getting started.

And it’s all thanks to what I’m calling the Economic Singularity.

This isn’t just another market cycle or recession. It’s a fundamental restructuring of how wealth is created, how work is valued and who gets left behind. 

Make no mistake: This could either cost you dearly or make you significantly wealthier.

That’s why I’ve broken my silence and filmed a special video to explain what’s happening.

I want you to have a clear-eyed understanding of what’s really driving these changes happening behind the scenes. That way, you can prepare for what’s next and learn exactly how to protect yourself – and profit – from these unprecedented economic changes.

To discover the precise strategies and specific stocks that are already thriving amid this turmoil, I urge you to watch my new presentation now.

The sooner you understand what’s really unfolding – and position yourself accordingly – the better off you’ll be when this shift accelerates.

Sincerely,

Louis Navellier

Hello, Reader.

A lot can happen in 100 days.

The California gray whale migrates from the waters of Baja California, Mexico, to its summer feeding grounds in the Arctic.

You’re favorite HBO series could air an entirely new season, beginning to end.

Or, the U.S. could stumble into a trade war that sparks recession fears.

On Tuesday, we hit “Day 100” of President Donald Trump’s second term. And the following day, the Commerce Department reported U.S. GDP shrank by 0.3% in the first quarter, the first drop in growth since early 2022.

It is important to note, though, that while two quarters in a row of shrinking GDP is a key indicator of a recession, it’s not the sole determinant.

But the culprit behind the recent decline in U.S. GDP? In part, the trade war.

Businesses are getting nervous. And rightfully so.

No one knows where tariffs are headed. It’s an uncertainty that continues to spook investors. Ultimately, the S&P 500 slipped 0.8% in April, the Dow Jones Industrial Average dropped 3.2%, and both posted their third straight monthly loss. Only the Nasdaq Composite managed a 0.9% gain.

Now, as volatility increases, certain sectors are vulnerable to overbought conditions, meaning they may be overextended and poised for a potential mean reversion.

And this includes the tech sector.

As it happens, beyond Trump’s 100 days, this week also brought earnings reports from four of the “Magnificent Seven” tech stocks… the popular companies that I believe are primed for an impending crash.

So, in today’s Smart Money, I’ll first break down the Mag 7’s latest earnings reports. While the results were mixed, they shared a common theme: concern over the future of the trade war.

Then, I’ll share more about the tech reset that I see coming, what companies you should be looking for instead… and how you can find them.

Earnings, Earnings, and More Earnings

Before we dive into this week’s big tech earnings, let’s take a look back at two Mag 7 stocks that reported earnings a little bit earlier…

Tesla Inc. (TSLA)

Tesla kicked off earnings season for the Mag 7 on April 22 – and it wasn’t pretty. Revenue fell 9% from the previous year to $19.34 billion, largely missing Wall Street’s $21.11 billion estimate. Earnings per share came in at just $0.27, well below the $0.39 analysts predicted.

Trump’s tariff plans have raised concerns about rising costs for key electric vehicle components, from battery cells and circuit boards to manufacturing equipment and glass.

In response to this impact, Musk claimed Tesla is “the least affected car company” when it comes to trade issues. However, Tesla refrained from giving 2025 guidance, citing ongoing uncertainties.

Alphabet Inc. (GOOG)

Two days later on April 24, Alphabet reported revenue of $90.23 billion and earnings per share of $2.81, surpassing analysts’ expectations.

AI advancements, including the rollout of Gemini 2.5, played a significant role in the company’s growth. The “Search and Other” segment grew 9.8% year-over-year, reaching $50.7 billion.

However, the tech giant anticipates potential challenges due to upcoming trade policy changes. Google Business Chief Officer Philipp Schindler stated that the changes will “cause a slight headwind to our Ads business in 2025, primarily from APAC-based retailers.”

That brings us to this week…

Meta Platforms Inc. (META)

On Wednesday, Meta stock rallied more than 5% after reporting earnings of $6.43 per share, compared to earnings estimates of $5.28 per share. Revenue climbed 16% year-over-year to $42.31 billion, topping expectations for revenue of $41.10 billion. Forward-looking guidance was also positive, as company management forecasts revenue between $42.5 billion and $45.5 billion.

The company remains optimistic about its AI moves. In fact, CEO Mark Zuckerberg noted that he sees “five major opportunities” for AI at Meta. The company will use the technology for “improved advertising, more engaging experiences, business messaging, Meta AI, and AI devices.”

Meta will also expand its AI infrastructure and plans to put some of its capital expenditures toward generative AI.

“Our business is also performing very well, and I think we’re well positioned to navigate the macroeconomic uncertainty,” Zuckerberg said on the company’s earnings call.

Microsoft Corp. (MSFT)

Shares of Microsoft opened about 9% higher on Thursday after the company announced earnings of $3.46 per share, beating analysts’ expectations of $3.22 per share. Revenue came in at $70.07 billion, which also topped the expected $68.42 billion. This marks the fourth quarter in a row that the tech giant beat Wall Street’s estimates.

The Intelligent Cloud segment, including Azure, saw a 21% revenue increase driven by AI demand. The company plans to invest $80 billion in data centers to support AI workloads, highlighting its commitment to AI infrastructure.

Apple Inc. (AAPL)

Also on Thursday, Apple announced second fiscal-quarter earnings with revenue of $95.4 billion and earnings per share of $1.65. Although the company beat estimates, shares dipped 4% in extended trading.

On the earnings call, CEO Tim Cook said the impact of tariffs was “limited” last quarter thanks to supply chain adjustments. The company warned that trade-related costs could rise in the coming months. It expects modest revenue growth this quarter.

Amazon.com Inc. (AMZN)

Amazon’s first quarter earnings surpassed expectations on Thursday when it reported earnings per share of $1.59, beating analysts’ estimates of $1.36 per share. Revenue of $155.67 billion also topped analysts’ estimates of $155.04 billion.

However, the company anticipates operating income between $13 billion and $17.5 billion, falling short of the $17.8 billion that analysts had projected. Amazon called out “tariffs and trade policies” as a factor that could make its guidance subject to change.

The final Mag 7 company – Nvidia Corp. (NVDA) – won’t report earnings until May 28.

Now, while all of these companies share concerns over the new tariff regime, they also have something else in common…

Surviving the Tech Reset

These big tech giants are trading at incredibly lofty valuations.

The median Mag 7 company trades at 27.9X forward earnings, or 55% higher than the median S&P 500 company. Looking at just one out of the seven, Meta is trading at 22X forward earnings, or 23% higher than the median S&P 500 company.

As I mentioned, overbought companies – like the Mag 7 – may be poised for potential mean reversions. That means America’s most popular tech stocks could come plummeting back to Earth, erasing years of investor profits.

So, with the risk of these overbought stocks correcting, it’s crucial to stay informed…

Like how the leaders of these companies – including Jensen Huang, Tim Cook, and Jeff Bezos – are offloading their own shares at a record pace.

In fact, according to a financial filing released just yesterday, Bezos disclosed a plan to sell up to 25 million shares of Amazon stock over a period ending May 29, 2026. (Bezos stepped down as CEO in 2021, but he remains the company’s top shareholder.)

However, there is a way to sidestep the incoming potential losses on overvalued stocks… 

It’s by moving your money out of Big Tech and into the investments that the “top 1%” are piling into: “Next-Gen Stocks.”

Next-Gen Stocks are the next big “wealth transfer” in America, and they are converging with AI to bring about massive amounts of innovation to an industry that is estimated to grow globally to a $12.6 trillion value by 2030. 

I put all the information that you need to know about coming tech reset – and these Next Gen Stocks – in a free, special broadcast that you can access here.

Regards,

Eric Fry

Editor’s note: “The Second AI Boom: How to Prepare for a Trillion-Dollar Swell” was previously published with the title “AI’s Second Boom: How the Next 24 Months Could Transform Your Portfolio” in April 2025. It has since been updated to include the most relevant information available.

Back in late 1994, tech company Netscape launched its web browser to the world. And no one knew it at the time, but that moment sparked what would become the most explosive investment boom in modern history…

Over the following four years, from late ‘94 to ‘99, the Dot-Com Boom gave early investors the chance to become millionaires… even billionaires. Just look to Stripes founder Ken Fox. Alongside Walter Buckley and Pete Musser, Fox became a ‘paper billionaire’ by investing in B2B e-commerce companies during this profitable era. 

Though, massive paydays weren’t just reserved for early investors. It turns out that it didn’t matter if you were in the market on Day One.

In fact, the biggest gains actually came during the Dot-Com Boom’s second half.

How Today’s AI Boom Mirrors the Dot-Com Era – And What It Means for Investors

See: Cisco (CSCO), the poster child of this boom. 

As the world rushed to build out our modern internet infrastructure, the networking solutions provider saw demand for its equipment soar. The stock became a massive winner. 

From early 1995 to summer 1997 – early in the Dot-Com Boom – CSCO rallied about 200%

But did you know that the majority of the company’s gains came in the ‘second half’ of that boom?

Between summer 1997 and late ‘99, CSCO went parabolic, soaring an absurd 800%. 

In other words, in the first two years of the dot-com era, Cisco stock tripled. Then, in its last few years, CSCO rose about 9X. 

It’s the same story with Viavi Solutions (VIAV), another networking solutions provider for the internet buildout.

In the Dot-Com Boom’s first half, from early 1995 to summer ‘97, that stock rallied an astounding ~500%. 

But from mid-97 to late ‘99, it absolutely skyrocketed – nearly 3,000%. 

Qualcomm (QCOM) followed a similar pattern. 

That stock doubled in the first half of this boom, between early 1995 to summer ‘97. Then, it soared more than 2,800% from summer 1997 to late ‘99. 

Lather, rinse, repeat for other massive internet stock winners of the 1990s like Semtech (SMTC), Applied Materials (AMAT), Oracle (ORCL), Paychex (PAYX), Sanmina (SANM), etc. 

All were huge winners in the Dot-Com Boom. And all produced their biggest returns later on in the game. 

Why? 

Not because of Netscape’s browser debut, but because of what came after…

Why the Return of Manufacturing May Not Mean What You Think

Made in the USA.

It’s a powerful phrase that evokes powerful images.

Booming factories.

Rows of hardworking men and women in overalls.

Small and medium-sized towns thriving as American industry provides loads of good-paying jobs.

Those images are rooted deep in our national memory. When things were built in the USA, we didn’t just compete … we led the world.

President Donald Trump promises to bring that feeling back. His economic agenda is pouring billions into reshoring American manufacturing.

When he speaks about this, many people imagine a new era of American industrial strength.

But if there is one thing that always stays the same in this world, it’s that everything is always changing.

This isn’t the same world it was in the late 20^th century when American manufacturing dominated the global economy.

But we can still revitalize the refrain of “Made in the USA” if we are willing to acknowledge the world’s realities today.

I’m going to talk about some of those today, and why an upcoming catalyst could set this new wave of American manufacturing in motion. For savvy investors, this will unleash an abundance of new opportunities.

Three Reasons Why Robotics Will ‘Make it in the USA’

For “Made in the USA” to mean something again it won’t be humans doing the work. It will have to be robots.

That’s the simple conclusion of our tech investing expert, and Cal Tech trained economist, Luke Lango.

But you don’t have to be a trained economist to reach this conclusion. Even a cursory look at the math provides a compelling story.

There simply aren’t enough Americans willing, or able, to fill manufacturing jobs anymore – not at wages that can compete globally and not at the scale we need to reignite American manufacturing.

Let’s start with the population issue. Here’s Luke explaining the math.

As of today, fewer than 2 million Americans are filing for unemployment benefits. Meanwhile, the president’s reshoring goals imply replacing tens of millions of overseas manufacturing jobs.

China has more than 100 million manufacturing workers.

India has about 20 million.

Vietnam has more than 10 million.

That is 130 million to 150 million manufacturing jobs in just three Asian countries, many of which feed U.S. supply chains. Yet the United States cannot staff its existing plants, never mind an expanded industrial base, without automation.

Then there is Americans’ seeming reluctance to do these jobs. Here’s Luke again:

The United States offshored manufacturing work for a reason. The positions are difficult, often dangerous, and generally not the kind of roles in which young Americans see a future.

A recent Cato Institute survey captured the mismatch:

80% of respondents say the nation would be better off if more people worked in manufacturing.

Only 20% say they would be better off working in a factory.

And finally, there’s the economic reality: Robots are just plain cheaper.

Luke again:

• Minimum wage in China averages about $300 a month.
• Vietnam: roughly $200.
• India: below $200 in many regions.
• U.S. federal minimum wage implies more than $1,200 a month, and factories often pay far more.

U.S. labor is four to six times as expensive as most Asian labor. That math doesn’t pencil out unless companies deploy AI-powered machines that don’t take breaks, benefits, or paid time off.

The conclusion is self-evident – the future of American industry will be built by machines.

The new workers of the 21^st century will be robots, automation systems, and AI-powered factories. That rapidly emerging shift is creating one of the most explosive opportunities since the dawn of the internet.

It All Started With Covid

A historic wave of cash – nearly $7 trillion – is sitting on the sidelines in money market funds.

Why did this happen? It all started in 2020.

Here is Luke explaining how this stockpile of cash developed.

With the stock market being so unpredictable, between the Covid Crash in 2020 and the Market Crash in 2022… 

A lot of folks started moving their money into cash and money market accounts. 

It seemed like the safest bet, right? 

The markets were like a roller coaster, and nobody wanted to lose their hard-earned money chasing stock gains.

And once the Fed started hiking interest rates… 

This trend accelerated aggressively.

We witnessed a staggering $2 trillion being pulled out of the stock market and tucked away into money markets in the past couple years alone.

Everyone suddenly decided that cash was king… 

And that only pumped more air into what I’m calling a “cash bubble.”

All that money is poised to flood into the markets after a critical signal next week – May 7, to be exact.

Those who act now could ride the surge of America’s new industrial revolution — and potentially turn modest stakes into life-changing wealth.

Luke explains it all in a free event he held earlier this week – the 2025 Summer Panic Summit. The presentation answers a lot of questions about what the new manufacturing boom in American will look like, and how investors can benefit.

I’ll let Luke have the final word.

President Trump is set to ignite a $7 Trillion overnight shock to the markets as soon as this week. The decisions you make in the next few days could be what makes or breaks your financial future for years to come… Please prepare before May 7th.

You can catch the replay by clicking here.

Enjoy your weekend,

Luis Hernandez

Editor in Chief, InvestorPlace

Jobs data beats expectations … Trump demands lower rates again … when Louis Navellier sees rates coming … weakening consumer data … a win on the China front?

This morning, the U.S. payrolls report came in stronger than expected.

The U.S. economy added 177,000 jobs in April, above the expectation of 133,000 jobs. This kept the overall unemployment rate at 4.2%.

Meanwhile, average hourly earnings climbed 0.2%. This was just below the 0.3% forecast. Similarly, the annual rate of 3.8% was below the 3.9% expectation.

The quick takeaway is that the economy remains steady and reasonably strong.

I write “reasonably” because we should factor in yesterday’s softer weekly jobless claims, which weren’t counted in today’s jobs numbers.

That report showed that initial unemployment claims posted an unexpected increase. First-time filings for unemployment insurance clocked in at 241,000, up 18,000 from the prior period and above the estimate of 225,000.

Now, some analysts are suggesting part of the increase might be attributable to spring break for public schools. But even so, continuing unemployment claims suggest growing weakness.

Here’s CNBC:

Continuing claims, which run a week behind and provide a broader view of layoff trends, rose to 1.92 million, up 83,000 to the highest level since Nov. 13, 2021.

Overall, even with those continuing claims numbers, we’re interpreting the last two days of jobs data as a win for the economy.

But for Fed watchers, is that good or bad?

This morning’s data don’t paint the picture of an economy in dire need of interest rate cuts.

And as we’ve highlighted in prior Digests, Federal Reserve Chairman Jerome Powell likely remains scarred by his characterization of inflation as “transitory” back in 2021. That inaccurate call opened the door to the worst inflation in four decades as well as merciless attacks on his judgement. My guess is that Powell is gun-shy about cutting rates too soon today, cracking open the door to another bout of inflation.

President Trump is not shy…

From the President on Truth Social this morning:

Just like I said, and we’re only in a TRANSITION STAGE, just getting started!!!

Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!

One must wonder whether this relentless pressure from Trump is ultimately counterproductive. His public demands for lower interest rates could actually harden Powell’s resolve, as the Fed Chair may be unwilling to appear influenced by the President or politically weak.

Given that the current data doesn’t demand an urgent rate cut, Powell might opt to hold off another month – if only to assert the Fed’s independence.

Optics aside, if legendary investor Louis Navellier gets his way, Powell and the Federal Reserve will be riding to the rescue next week

Let’s begin with Louis’ Flash Alert in Growth Investor yesterday:

There’s a growing sense of optimism because on Fox Business yesterday, Scott Bessent said the Fed should be cutting rates.

And that’s because the two-year Treasury yield is at its lowest level since last September. And it’s so far below the federal funds rate, there’s really three rate cuts the Fed should make. 

And here’s this morning’s update after the jobs report:

Treasury yields rolled slightly in the wake of the payroll report. Yields are definitely at least 50 basis points below the fed funds rate.

If you look at the two-year Treasury note, they need to cut – they’re above market rates and they’re being restrictive.

For a visual on Louis’ point, below is the 2-year Treasury yield.

Unlike the 10-year Treasury yield, which has been volatile in 2025, the 2-year yield has been on a relatively smoother decline since January.

And as Louis highlighted, earlier this week, it notched its lowest level since last fall. But it has rolled slightly based on the jobs data.

Source: TradingView

Over the years, Louis has repeatedly said that the Fed doesn’t like to fight market rates. So, with the 2-year yield at 3.78% while the fed funds target rate sits at a range of 4.25% – 4.50%, it suggests lower rates ahead.

On that note, if you missed last night’s event with Luke Lango about investing in robotics and humanoids today, you can catch a free replay here.

Here’s Luke:

Steel mills, chip fabs, and assembly lines buzzing with “Made in the U.S.A.” labels: The president has promised all of this in a bid to get America’s factories booming.

There’s just one teensy problem…

You can’t rebuild American manufacturing without robots…

That’s why the next great fortune won’t come from chatbots or cloud software. It will come from physical AI—the robotic arms, vision sensors, and autonomous movers that transform concrete slabs into fully automated factories.

Last night, Luke dove into all these details and more, also highlighting his favorite robotics plays today. He also explains why he’s betting on an event next week that will pop the $7 trillion “cash bubble” parked in money-market funds today. Luke believes this will unleash a massive rotation back into stocks.

Here’s that link again to the free replay.

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg