Category Penny Stocks

Editor’s note: “An Expert Method to Overcome a Turbulent Stock Market” was previously published in January 2025 with the title, “How to Find Success Despite Wild Stock Market Volatility.” It has since been updated to include the most relevant information available.

When it comes to the stock market, it can be a bit like a hurricane at sea: powerful, unpredictable, and capable of turning calm waters into chaos in an instant.

We’ve been enduring our fair share of market chaos lately, with the S&P 500 seemingly up one week and down the next. Investors are practically begging for monotony. But wilder price action like this may be our new normal…

You see; historically speaking, the stock market averages about one bear market every five or six years. But in the past six years, we’ve had not one… not two… but three different bear markets. 

There was the flash crash of late 2018, which saw stocks briefly fall into a bear market right before the holidays. There was also the COVID crash of 2020, wherein stocks plunged in the fastest market crash in history. And then there was the inflation crash of 2022, when tech stocks were obliterated by sky-high interest rates. 

Three unforeseen bear markets in the past six years – that is wild. 

But, of course, on the other hand, we’ve also seen some huge stock market successes, too.

Navigating Both Flash Crashes & Fast Recoveries

On average, the stock market rises about 10% per year. But in 2024, stocks climbed 23%. They rose around 27% in 2021. And in 2019, stocks rallied about 29%.

In other words, over the past six years, the S&P 500 has achieved three different years with nearly 30% returns. As a matter of fact, of the stock market’s 10 best years since 1950, three have occurred since 2018. 

Three different bear markets and three of the best years ever for stocks – all within the past six years.

So, if the stock market has felt wild to you lately, that’s because it has been. 

But this wildness could be the new norm for Wall Street going forward. 

We can thank technology for that – at least, that’s my opinion. 

Why? Because algorithms run the market now. 

These days, algorithmic trading accounts for approximately 60- to 75% of total trading volume in the U.S. stock market. That means most trades are automatic, executed by bots adhering to pre-set parameters. 

And, unlike humans, robots don’t really ask why. They just do what they are programmed to. 

So, when something bad happens, all the algorithmic-driven systems rush toward an exit. And when something good happens, they race to get involved. That’s why, in my view, algorithmic trading creates crowding. 

As a result, we get wild swings in the market – both up and down. The algorithms drive momentum one way or the other, and the market follows. 

We get flash crashes and fast recoveries; big bear markets and massive bull runs; major meltdowns and momentous melt-ups. 

We get stock market volatility.

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 137 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.

Upgraded: Buy to Strong Buy

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
BABA	Alibaba Group Holding Limited Sponsored ADR	A	B	A
CART	Maplebear Inc.	A	B	A
CHWY	Chewy, Inc. Class A	A	C	A
CMS	CMS Energy Corporation	A	C	A
EPD	Enterprise Products Partners L.P.	A	C	A
GRAB	Grab Holdings Limited Class A	A	C	A
HLN	Haleon PLC Sponsored ADR	A	C	A
LNG	Cheniere Energy, Inc.	A	C	A
LYG	Lloyds Banking Group plc Sponsored ADR	A	C	A
MAA	Mid-America Apartment Communities, Inc.	A	C	A
MELI	MercadoLibre, Inc.	A	B	A
REG	Regency Centers Corporation	A	C	A
WPM	Wheaton Precious Metals Corp	A	B	A

Downgraded: Strong Buy to Buy

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
AFL	Aflac Incorporated	A	B	B
AUR	Aurora Innovation, Inc. Class A	A	C	B
CASY	Casey’s General Stores, Inc.	A	C	B
COST	Costco Wholesale Corporation	A	C	B
DAL	Delta Air Lines, Inc.	A	C	B
DASH	DoorDash, Inc. Class A	A	C	B
EQH	Equitable Holdings, Inc.	A	B	B
FTI	TechnipFMC plc	B	B	B
LYV	Live Nation Entertainment, Inc.	A	B	B
NFLX	Netflix, Inc.	A	B	B
SAP	SAP SE Sponsored ADR	A	C	B
TCOM	Trip.com Group Ltd. Sponsored ADR	B	B	B
TRP	TC Energy Corporation	A	C	B
WFC	Wells Fargo & Company	A	B	B

Upgraded: Hold to Buy

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
AWK	American Water Works Company, Inc.	B	C	B
BEPC	Brookfield Renewable Holdings Corporation Class A	B	C	B
BKNG	Booking Holdings Inc.	B	C	B
CLX	Clorox Company	B	C	B
CNA	CNA Financial Corporation	B	C	B
DOC	Healthpeak Properties, Inc.	B	C	B
EOG	EOG Resources, Inc.	B	C	B
ERIE	Erie Indemnity Company Class A	B	C	B
FMS	Fresenius Medical Care AG Sponsored ADR	B	B	B
FNF	Fidelity National Financial, Inc. – FNF Group	B	C	B
GLPI	Gaming and Leisure Properties, Inc.	B	C	B
GOLD	Barrick Gold Corporation	B	B	B
JNJ	Johnson & Johnson	B	C	B
KB	KB Financial Group Inc. Sponsored ADR	B	B	B
KDP	Keurig Dr Pepper Inc.	B	C	B
KIM	Kimco Realty Corporation	B	B	B
MET	MetLife, Inc.	B	C	B
NVS	Novartis AG Sponsored ADR	B	C	B
PANW	Palo Alto Networks, Inc.	B	C	B
PEN	Penumbra, Inc.	B	C	B
RIVN	Rivian Automotive, Inc. Class A	B	C	B
SRE	Sempra	B	D	B
SW	Smurfit Westrock PLC	B	C	B
TSLA	Tesla, Inc.	B	D	B
UDR	UDR, Inc.	B	C	B
UL	Unilever PLC Sponsored ADR	B	C	B
WPC	W. P. Carey Inc.	B	D	B

Downgraded: Buy to Hold

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
AIZ	Assurant, Inc.	C	C	C
AMZN	Amazon.com, Inc.	C	B	C
BAP	Credicorp Ltd.	C	C	C
CF	CF Industries Holdings, Inc.	C	C	C
CPAY	Corpay, Inc.	B	C	C
CTSH	Cognizant Technology Solutions Corporation Class A	C	C	C
DVA	DaVita Inc.	C	B	C
EMN	Eastman Chemical Company	C	C	C
EXE	Expand Energy Corporation	B	C	C
FLUT	Flutter Entertainment Plc	B	C	C
HDB	HDFC Bank Limited Sponsored ADR	B	C	C
IBN	ICICI Bank Limited Sponsored ADR	C	C	C
IHG	InterContinental Hotels Group PLC Sponsored ADR	C	C	C
KSPI	Kaspi.kz Joint Stock Company Sponsored ADR RegS	C	C	C
LAMR	Lamar Advertising Company Class A	C	D	C
NU	Nu Holdings Ltd. Class A	D	B	C
NWS	News Corporation Class B	C	B	C
PCTY	Paylocity Holding Corp.	C	C	C
RELX	RELX PLC Sponsored ADR	C	C	C
SCCO	Southern Copper Corporation	C	B	C
TS	Tenaris S.A. Sponsored ADR	C	C	C
UNH	UnitedHealth Group Incorporated	C	C	C
YUMC	Yum China Holdings, Inc.	C	C	C

Upgraded: Sell to Hold

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
A	Agilent Technologies, Inc.	C	C	C
ADI	Analog Devices, Inc.	B	C	C
ADM	Archer-Daniels-Midland Company	C	C	C
AME	AMETEK, Inc.	C	C	C
ASX	ASE Technology Holding Co., Ltd. Sponsored ADR	C	C	C
CARR	Carrier Global Corp.	C	C	C
EXPD	Expeditors International of Washington, Inc.	D	B	C
FDS	FactSet Research Systems Inc.	C	C	C
GMAB	Genmab A/S Sponsored ADR	D	A	C
HSY	Hershey Company	C	C	C
JKHY	Jack Henry & Associates, Inc.	C	C	C
MDLZ	Mondelez International, Inc. Class A	D	C	C
MNST	Monster Beverage Corporation	C	C	C
MT	ArcelorMittal SA ADR	C	C	C
NBIX	Neurocrine Biosciences, Inc.	C	C	C
PBR.A	Petroleo Brasileiro SA Sponsored ADR Pfd	C	C	C
PCG	PG&E Corporation	C	C	C
PFG	Principal Financial Group, Inc.	C	C	C
ROK	Rockwell Automation, Inc.	C	C	C
SWK	Stanley Black & Decker, Inc.	C	C	C
SYY	Sysco Corporation	D	C	C
TAK	Takeda Pharmaceutical Co. Ltd. Sponsored ADR	C	C	C
TECK	Teck Resources Limited Class B	D	C	C
TRMB	Trimble Inc.	D	C	C
U	Unity Software, Inc.	C	C	C
VRTX	Vertex Pharmaceuticals Incorporated	C	C	C
WPP	WPP Plc Sponsored ADR	C	C	C
WTRG	Essential Utilities, Inc.	C	C	C

Downgraded: Hold to Sell

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
AFG	American Financial Group, Inc.	D	C	D
ALLE	Allegion Public Limited Company	D	C	D
BBD	Banco Bradesco SA Sponsored ADR Pfd	D	B	D
CNQ	Canadian Natural Resources Limited	D	C	D
COO	Cooper Companies, Inc.	D	B	D
EPAM	EPAM Systems, Inc.	D	C	D
EW	Edwards Lifesciences Corporation	D	C	D
GIB	CGI Inc. Class A	D	C	D
HD	Home Depot, Inc.	D	C	D
LIN	Linde plc	D	C	D
LOW	Lowe’s Companies, Inc.	D	C	D
NVR	NVR, Inc.	D	C	D
PFGC	Performance Food Group Co	D	D	D
RDY	Dr. Reddy’s Laboratories Ltd. Sponsored ADR	D	C	D
SHW	Sherwin-Williams Company	D	C	D
SLF	Sun Life Financial Inc.	D	D	D
STE	STERIS plc	D	C	D
STLD	Steel Dynamics, Inc.	D	D	D
TGT	Target Corporation	D	C	D
TMO	Thermo Fisher Scientific Inc.	D	C	D
TOL	Toll Brothers, Inc.	D	D	D
VIV	Telefonica Brasil S.A. Sponsored ADR	D	C	D
XYZ	Block, Inc. Class A	D	C	D

Upgraded: Strong Sell to Sell

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
DG	Dollar General Corporation	F	D	D
FMX	Fomento Economico Mexicano SAB de CV Sponsored ADR Class B	F	C	D
ICLR	ICON Plc	F	C	D
STZ	Constellation Brands, Inc. Class A	F	C	D
SWKS	Skyworks Solutions, Inc.	F	D	D
ZBH	Zimmer Biomet Holdings, Inc.	F	D	D

Downgraded: Sell to Strong Sell

Symbol	Company Name	Quantitative Grade	Fundamental Grade	Total Grade
CSX	CSX Corporation	F	C	F
NVT	nVent Electric plc	F	D	F
WDS	Woodside Energy Group Ltd Sponsored ADR	F	C	F

To stay on top of my latest stock ratings, plug your holdings into Stock Grader, my proprietary stock screening tool. But, you must be a subscriber to one of my premium services. Or, if you are a member of one of my premium services, you can go here to get started.

Sincerely,

Louis Navellier

Editor, Market 360

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Article printed from InvestorPlace Media, https://investorplace.com/market360/2025/02/20250225-blue-chip-upgrades-downgrades/.

©2025 InvestorPlace Media, LLC

Editor’s note: “An Outperforming Investment Tool to Help You Game the Market” was previously published in January 2025 with the title, “Introducing: An Outperforming Investment Tool to Help You Game the Market.” It has since been updated to include the most relevant information available.

For the past several months, since it became clear that Donald Trump won the U.S. presidential election, the stock market has been highly volatile. 

The S&P 500 rallied 4% in the week after the election – only to crash 3% the following week. Then stocks rose 4% into December just to sink 5% by the month’s end… popped 6% higher in mid-January before dropping 3% after the inauguration. And here in February, stocks gained 4% in the first few weeks of the month, then flopped about 4% over the past week. 

Wall Street has been stuck on a roller-coaster ride since early November. 

With all this volatility, investors are dying to know what the next four years will look like for stocks under “Trump 2.0.” Is this unpredictability the new normal?

Possibly… 

I have six words of advice for this era: embrace the boom, beware the bust. 

Embrace the Boom; Beware the Bust

Thanks in large part to the AI investment megatrend and long-awaited rate cuts from the Federal Reserve, the U.S. stock market has been booming for the past two years. 

That is, the craze around artificial intelligence has sparked an exceptional surge in investment. Companies have been racing to create the infrastructure necessary to support next-gen AI. Indeed, Meta (META), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL) – pretty much all the world’s major tech companies continue to spend billions upon billions of dollars to build new AI data centers, create new applications, hire more engineers, etc. And all that investment has created a major economic boom.

Meanwhile, throughout 2022 – after embarking on the most aggressive rate-hiking cycle in nearly 50 years – the Federal Reserve finally slowed its pace of hikes. And here in 2024, the central bank actually started to cut rates. This has provided much-needed relief to consumers looking to finance big purchases and businesses looking to make new investments. This relief has also helped support an economic boom.

The result? Stocks have been soaring for two years. 

Since hitting its lows in October 2022 – just over two years ago – the S&P has surged more than 70% higher. In fact, it just posted its second consecutive year of 20%-plus gains. 

The index rose 24% in 2023. It popped another 23% in ’24. That is just the fourth time since the Great Depression – nearly 100 years ago – that the S&P 500 rallied more than 20% in back-to-back years. 

We are unequivocally in a stock market boom. 

And in our view, this boom is about to get even ‘boomier.’ 

Hello, Reader.

Tom Yeung here with today’s Smart Money.

Earlier this month, I found myself staring at a crisp white envelope on my desk.

The paper seemed to glow under the fluorescent lamp… a glossy corporate logo in the corner winking ominously at me.

It was… cue the foreboding music… my utility bill.

Now, I knew my Massachusetts-state utility bill would be high, because New England has the worst utility prices in the nation. However, it was even higher than I expected, because a surge in nationwide utility prices means that just about all Americans’ utility bills are rising 60% faster than average inflation.

Here’s the thing: This little envelope from my utility company and the sky-high bill likely sitting in your own inbox have more to do with your portfolio’s potential profits than you think.

For the first time since moving into our home, we’re considering adding solar panels to this 200-year-old house.

And as millions of other homeowners (and their state representatives) come to the same conclusion, we’re going to see a new boom in solar spending.

As Eric detailed in a recent Smart Money, solar stocks may soon become hot, hot, hot once again… especially during this second Trump administration.

So, in today’s Smart Money, I’d like to dive deeper into the solar industry’s latest, upcoming revolution, why we could see an uptick in solar spending, and what this all means for your portfolio.

Let’s dive in…

The Solar Revolution’s Third Act

The first American solar “revolution” started in California after then-Governor Arnold Schwarzenegger signed the Million Solar Roofs initiative – a cash incentive and rebate program that began in 2006. By 2020, roughly 15% of the state’s utility grid was from solar.

The second revolution began during President Donald Trump’s first term in office.

The surprising truth about the “drill, baby, drill” president is that solar output doubled under his watch, before doubling again during the Biden administration. Trump’s hands-off approach to power generation meant states like Texas and Florida expanded their incentive programs for solar installations with minimal federal intervention, and these efforts continued through the following administration. (These two states combined now produce more solar than California.)

The result is that power prices in both states have fallen in real terms since Trump first took office in January 2017.

The third revolution is now set to start… for three specific reasons:

1. Red-Hot Electricity Demand: The acceleration of AI data center construction has turned electricity generation into a “sunrise” industry, especially in states still lacking solar power.

   In the Mid-Atlantic, for example, auction prices for wholesale electricity have risen almost tenfold since last year on insatiable demand.

2. Cheapening Solar Prices: The levelized cost of solar energy is at least 29% lower than the cheapest fossil fuel option. The price of lithium-ion batteries – an essential component of solar installations – is also in retreat.

   Prices have dropped 25% in the past year alone, thanks to sharp year-over-year decreases in lithium prices (-22%) and cobalt prices (-25%). This makes solar broadly more affordable for utilities, which must provide energy in both daytime and night.

3. State Regulations: Then there are homeowners like me… staring at our rising utility bills.

   One effect of this will be more residential solar. The U.S. Energy Information Administration believes residential rooftop solar is growing at 25% annually, and that rate could accelerate as electricity prices continue to rise.

   But the biggest prize will come from regulatory pressures for utilities to construct more capacity. Utility-scale projects currently make up around two-thirds of installed U.S. capacity and will likely remain the largest growth driver thanks to economies of scale.

In all, we’re already seeing some effects of these three catalysts…

A Compelling Opportunity

Last week, Massachusetts state regulators announced plans to force local utilities to reduce total gas bills “by at least 5%” after public outcry over heating costs. Utilities seeking to raise prices in states like New York will almost certainly find it more difficult going forward.

The math is also changing for public utilities.

Eversource Energy (ES), a New England-based utility company with few historical ties to solar power, is now considering large-scale solar as far north as New Hampshire – a state better known for icy downhill skiing than abundant sunshine.

In addition, solar farms can take as little as eight months to construct – far faster than gas-powered (one to three years) and nuclear (five-plus years) power plants.

Energy companies are seeing unprecedented short-term demand, and solar offers a quick way to meet that need while appeasing regulators and customers.

That is why Eric believes that solar stocks are presenting a compelling opportunity. It’s also why he recently added a promising solar investment to his Fry’s Investment Report portfolio that’s primed for significant growth.

It’s an investment that Eric previously took an almost 80% gain from during the first Trump administration. This go-around, he believes double that first gain is well within reach.

To learn more about this company, and all the stocks in Eric’s portfolio, click here to learn about becoming a Fry’s Investment Report member today.

Regards,

Thomas Yeung

Markets Analyst, InvestorPlace

P.S. As we’ve been talking about all week here, at 8 p.m. ET tonight, TradeSmith CEO Keith Kaplan goes live with his full market briefing: The Last Melt-Up. And it couldn’t be more urgent. The S&P 500 is pulling back. President Trump’s agenda is facing headwinds in Washington. Inflation looms. And the Fed seems stuck in neutral.

Is the great meltdown finally here? Is it time to cut your losses and sell? Join Keith tonight at 8 p.m. ET here and you’ll get the full answers. Or you can sign up here.

The Last Melt-up starts tonight at 8 PM … Nvidia’s earnings are strong but disappoint Wall Street … how Louis Navellier is investing today … a rare earth metals deal between Ukraine and the U.S. … another good headline for Bitcoin

We begin today with a final reminder that tonight at 8 PM Eastern, Keith Kaplan, CEO of our corporate affiliate TradeSmith, is going live.

His presentation focuses on two things:

• The coming stock melt-up that Keith’s algorithms have just flagged (even considering the sell-off in recent days)
• A suite of tools that can help investors ride that surge higher and then get out near the top, escaping before the worst of the ensuing crash wipes out unprepared investors

Behind Keith’s melt-up prediction is a market signal that’s rooted in historical data – and data is where TradeSmith excels.

You see, beyond being our corporate partner, TradeSmith is an investment research shop that focuses on quantitative analysis. They’ve spent over $19 million and over 11,000 man-hours developing their analytical algorithms. And their latest quant breakthrough – the “MQ Algorithm” – has been signaling a coming melt-up.

But even in a melt-up, some stocks suffer sharp drawdowns – which can present fantastic buying opportunities. Given this, Keith and his team of engineers developed a complementary strategy that isolates such pullbacks in top-tier stocks then buys them to ride the rebound.

Overall, in the back tests, the strategy boasted a near 80%-win rate 21 days later, with an average return of just under 16%.

Tonight at 8 PM, Keith will dive more into more details on this. He’ll also cover:

• What’s behind the recent market melt-up signal
• How he’s preparing investors users to take advantage
• 10 stocks positioned to ride the melt-up higher…and 10 stocks to avoid

If you haven’t reserved your seat yet, just click here for instant registration, and we’ll see you tonight.

Nvidia’s “good, but not good enough” earnings

In yesterday’s Digest, we highlighted how the S&P 500 had just bounced off the critical support level of its 100-day MA. Whether that bounce continued or not could drive market direction for the next several weeks.

The most immediate influence on that budding bounce was Nvidia’s earnings report that arrived yesterday after the closing bell.

The numbers were good, but not good enough to kick Wall Street back into full-blown “party” mode.

The chip giant’s Q4 results easily beat Wall Street estimates, and management upped its forward guidance. But Nvidia’s largest source of revenue, data center revenue, slowed substantially. This raised some eyebrows, as did some margin compression.

Here’s MarketWatch:

Nvidia’s stock decline is building [in Thursday’s session], with investors seemingly focused on quibbles such as continued margin pressure and a smaller-than-usual beat on the guidance.

As I write at mid-day, Nvidia shares are down almost 3% despite the beat.

Meanwhile, the major indices have been all over the place. Wall Street is digesting Nvidia’s earnings, the news that Trump’s Mexico/Canda tariffs will go into effect on March 4, and weekly jobless claims that came in above expectations.

Unfortunately, that leaves us where we were yesterday…

With the S&P sitting directly atop its 100-day MA.

We’re still cautiously optimistic about a bounce.

The next big catalyst is tomorrow’s Personal Consumption Expenditures Price Index report, and what is reveals about inflation.

We’ll report back.

The more interesting part of Nvidia’s earnings report

Coming into Nvidia’s earnings report, investors were concerned about the impact of the Chinese low-cost AI platform DeepSeek.

Its advanced technology suggested that the global AI buildout could occur at a lower cost with less power consumption.

Yesterday, Nvidia CEO Jensen Huang threw cold water on that idea. From CNBC:

[Huang] said next-generation AI will need 100 times more compute than older models as a result of new reasoning approaches that think “about how best to answer” questions step by step.

“The amount of computation necessary to do that reasoning process is 100 times more than what we used to do,” Huang told CNBC…

He cited models including DeepSeek’s R1, OpenAI’s GPT-4 and xAI’s Grok 3 as models that use a reasoning process.

In Tuesday’s Digest, I wrote, “I hope you didn’t sell your AI energy stocks back in January when the news of DeepSeek broke.”

That goes double today after Huang’s comment.

Bottom line: Despite Wall Street’s pouty reaction to Nvidia’s earnings, the AI trend is alive and well.

How legendary investor Louis Navellier recommends you invest in AI today

If you’re new to the Digest, Louis is a multidecade veteran investor who’s been out in front of just about every twist and turn of the AI boom. His quantitative algorithms have enabled him to get in early on each mini-phase of the AI rush.

Most notably, his quantitative stock picking system got his Growth Investor subscribers into Nvidia in 2019. They’re currently sitting on 2,924% gains.

Today, Louis is urging investors to add “AI Appliers” – companies finding ways to use AI to grow revenue and improve margins – to their portfolios. His most recent example of an AI Applier is one we flagged earlier this month…

Walmart.

(Full disclosure: I own Walmart.)

Louis reviewed Walmart’s earnings report in his latest issue of Market 360. After addressing how the report reflected consumer concerns about tariffs, Louis dove into the details that many investors overlooked, and they suggest one thing…

Walmart is becoming an AI Applier Juggernaut.

Here’s a quick summation of Louis’ points:

• Walmart has created a new AI agent for its merchants to help “get to the root cause of issues related to things like out of stocks or overstocks with more accuracy and speed.”
• The company is using tools for coding assistance that will “help streamline deployments and deliver code faster with fewer bugs.”
• Walmart has already been using AI to help reduce costs and boost margins.
• The Walmart+ subscription service is helping management understand its shoppers. This AI tool tracks spending habits and creates better recommendations for future buys.
• Walmart is using AI in its supply-chain automation. The company was an early user of warehouse robots.

From Louis:

I bring all this up because you might not think of Walmart when you think about AI.

But mark my words… In the not-too-distant future, every company will be involved with AI to one degree or another.

And those that don’t will go the way of the Dodo bird.

Walmart gets this, and so do a handful of AI Appliers, the companies that apply AI to better optimize their businesses.

The fact is, the early adopters of AI are already becoming more efficient and profitable. And we’re only at the beginning stages of this process.

If this message sounds familiar, it’s because you’ve heard similar versions from Eric Fry and Luke Lango. All our experts are banging the drum on this next evolution of AI.

We’re seeing an investment line in the sand between the companies that are applying AI to increase revenue, make smarter capital allocation decisions, and reduce costs… and those that are falling behind as technology races past them.

It’s worth doing a deep dive into the companies in your portfolio to make sure they’re implementing AI effectively.

For more on the AI Appliers Louis likes today – specifically, in the wake of the emergence of DeepSeek – you can check out his free research video right here.

Why the potential agreement between Ukraine and the U.S. on access to critical rare minerals is about AI

According to President Trump, Ukrainian President Volodymyr Zelensky will travel to Washington tomorrow to sign an agreement on sharing Ukraine’s rare earth minerals with the U.S. in exchange for greater U.S. security guarantees against Russia.

This would boost U.S.’s efforts to solidify its tech/AI supply chain away from China.

You see, “rare earth” minerals and metals are needed to make high-tech products – notably AI. But they’re also key for the green energy transition, a bevy of consumer electronics, infrastructure, and weaponry.

Ukraine has about 5% of the world’s rare earth deposits, according to a 2022 report by Ukraine’s association of geologists.

China has the largest volume of deposits and is behind most of the global processing.

Here’s the Center for Strategic & International Studies:

At present China produces 60 percent of the world’s rare earths but processes nearly 90 percent, which means that it is importing rare earths from other countries and processing them.

This has given China a near monopoly…

China announced a ban of rare earth extraction and separation technologies on December 21, 2023.

This has significant implications for U.S. national, economic, and rare earth security.

Rare earth elements—a group of 17 metals—are used in defense technologies, including missiles, lasers, vehicle-mounted systems such as tanks, and military communications…

Bottom line: This potential deal would be a big step toward the U.S. insulating itself from China in the AI race.

Finally, here’s something for bruised crypto investors to hold onto as prices slump

On Wednesday, Bitcoin entered an official bear market, as defined by a 20% pullback from the most recent high. Many altcoins are down far more.

In times like these, Bitcoin investors might find solace by focusing more on adoption and less on price.

After all, as a loose parallel, in the same way that a stock’s price eventually mirrors the quality of the underlying company’s earnings, Bitcoin’s price has, historically, mirrored the degree of its global adoption. And on that note, yesterday brought encouraging news.

Block (formerly “Square”) is officially rolling out its “Bitcoin inheritance” product.

Here’s CNBC:

What happens to your bitcoin when you die?

While traditional financial institutions allow for the seamless transfer of stocks, mutual funds and retirement plans, bitcoin’s self-custodial nature makes inheritance and estate planning inherently thorny. 

Coinbase requires probate court documents and specific will designations before releasing funds, while physical wallets offer little to no support, potentially leaving all that digital value stuck on a private key.

Jack Dorsey’s Block says it’s created a fix, and the company is now bringing it to market…

Block’s Bitkey self-custody bitcoin wallet [has] an inheritance feature that lets users set a beneficiary for their bitcoin holdings, creating a simple system for transferring the digital currency in the case of death.

This is just another piece of evidence demonstrating Bitcoin’s mainstream adoption. And that suggests higher prices out on the horizon.

To be clear, perhaps Bitcoin’s new bear market will turn into a real bruiser, and we have far lower to go. But even if that’s the case, history shows that this asset is fantastic at rising from the dead and proving the naysayers wrong.

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

Have a good evening,

Jeff Remsburg

I remember it like it was yesterday.

My son was an engineering student at Stanford when one of their research teams debuted an autonomous race car named Shelley.

As a self-professed car guy, my interest was immediately piqued.

It was a modified Audi TTS – a beautiful machine with perfect handling. The students even upgraded it with ceramic brakes since they fade slower and are easier to program.

But what really caught my attention wasn’t the car.

It was what powered it.

This self-driving project was made possible by semiconductor chips from NVIDIA Corporation (NVDA).

Maybe you’ve heard of ‘em.

I say that tongue-in-cheek, of course, because practically the whole world knows NVIDIA by now.

My introduction to NVIDIA could have happened to anyone. It was one of life’s happy coincidences. But after 40-plus years in this business, I’ve learned that keeping your eyes and ears open is key if you want to be a great investor. You never know when an opportunity is right in front of you.

By that same token, NVIDIA didn’t become the household name it is today because of self-driving cars.

Instead, it took advantage of another happy coincidence – one that changed the future of computing.

Back in 2012, a PhD student named Alex Krizhevsky used NVIDIA’s graphics processing units (GPUs) to train a deep neural network called AlexNet.

This model didn’t require a single line of traditional programming. It taught itself to recognize images. And when it crushed the competition in the ImageNet challenge, it proved that GPUs were far superior to CPUs (central processing units) for AI workloads.

That’s when everything changed.

Practically overnight, NVIDIA’s chips became must-haves for AI.

The AI Revolution was on.

Fast forward to today, and NVIDIA remains at the heart of the AI Revolution. But after such a historic run, investors had one big question ahead of its latest earnings report, which was released yesterday: Can the company keep up the momentum?

Because this time, the stakes were a little different…

• The rise of DeepSeek, a Chinese AI firm, has raised concerns about competition and the need for high-powered chips. (I discussed what happened – and why DeepSeek isn’t a threat – in this article.)
• Investors are growing concerned about Big Tech’s AI spending habits.
• Production delays in NVIDIA’s new Blackwell chip had some investors on edge.
• And as Big Tech companies look to make their own AI chips for internal use, Wall Street was watching closely.

So, in today’s Market 360, let’s break down NVIDIA’s latest results. We’ll dive into what they mean for the AI Revolution, and more importantly – how you can take advantage of the next stage of AI investing… even if you missed the first wave.

In August 2021, Americans were on edge. The Delta variant of COVID-19 had arrived.

This caused consumers to panic a bit, and it showed in the data. The Conference Board’s Consumer Confidence Index fell to 113.8, down from 125.1 in July. That was a steep 9% drop in one month.

Now, it’s happening again – but for very different reasons.

This morning, the Conference Board’s Consumer Confidence Index for February showed a reading of 98.3. That’s down from January’s 105 reading, and economists were looking for a reading of 102.5. Not only that, but it was the third-straight monthly decline for the index.

This is its biggest drop since August 2021.

This didn’t come out of nowhere, either.

On Friday, the University of Michigan’s Consumer Sentiment Survey also plunged. The February reading came in at 64.7, down almost 10% from January’s 71.7.

This also marked a 15-month low. The last time the consumer sentiment survey was this low was in October 2023, when people were grappling with the October 7 terrorist attacks by Hamas in Israel, the U.S.’s ballooning budget deficit and elevated Treasury yields and interest rates.

Now, the reasons for the drop in consumer confidence and sentiment this time around are different. Some of the current consumer pessimism could be weather-related. But the main driver we are seeing this time around is due to tariff threats. The Conference Board noted today that “there was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019.”

The truth is Americans are still feeling the sting of high prices. Even though inflation has cooled from its 2022 peak, it’s still sticking around. Gas, groceries, rent – they’re all more expensive than they were a year ago.

Tariffs threaten to raise the prices of imported goods and reduce consumer demand. So, consumers are on edge that these tariffs might unravel the progress made in bringing inflation down recently.

We already knew that S&P 500 companies are concerned. According to FactSet, more S&P 500 companies are citing “tariff” or “tariffs” on quarterly earnings calls than at any point since Q2 2019. 

But it was Walmart Inc.’s (WMT) earnings report last week really raised the first major red flag that consumers were concerned about tariffs.

So, in today’s Market 360, we’ll take a closer look at Walmart’s earnings and what the company management had to say about tariffs. I’ll also share the important details that investors are overlooking. Not only do they bode well for Walmart’s future, but they highlight a huge shift in companies’ approach to artificial intelligence. I’ll explain what’s shifting… and how you can profit from it.   

Let’s get started.

Trump tariffs and consumer confidence weigh on Wall Street … hope you didn’t sell your AI energy stocks … how to adjust your risk with position sizing

This morning, Wall Street moved lower after two headlines weighed on investors.

First, President Trump announced that tariffs on products from Mexico and Canada are back on.

Here’s CNBC:

President Donald Trump said that sweeping U.S. tariffs on imports from Canada and Mexico “will go forward” when a monthlong delay on their implementation expires next week.

“The tariffs are going forward on time, on schedule,” Trump said when asked at a White House press conference if the postponed tariffs on the two U.S. trading partners would soon go back into effect.

Products from Mexico and Canada will face a 25% levy, plus 10% duties on Canadian energy.

For investors and consumers, tariffs raise fears of a resurgence of inflation. And that dovetails into our next story – February’s downbeat consumer confidence report.

Here’s MarketWatch:

Consumer confidence [has sunk to an] 8-month low on worries about inflation and Trump tariffs. The decline was the third in a row since the index hit a 16-month peak of 112.8 in November…

Americans also said it was harder to get a job and they were more worried about their incomes.

Put these headlines together and Wall Street is unhappy. All three major indexes were down sharply earlier today with the Nasdaq off nearly 2% at one point.

The good news is that stocks are well off their lows of the morning.

Consider using this tech selloff as a shopping opportunity

I hope you didn’t sell your AI energy stocks back in January when the news of DeepSeek broke…

As you’ll recall, the emergence of the Chinese low-cost AI platform sent Wall Street into a panic.

The fear was that DeepSeek’s groundbreaking low-cost technology meant that the tsunami of AI investment capital that everyone anticipated wouldn’t materialize. And that meant saying “goodbye” to all those earnings-juiced, super-bullish stock price projections.

Not so much.

Here’s the Wall Street Journal:

Despite a brief period of investor doubt, money is pouring into artificial intelligence from big tech companies, national governments and venture capitalists at unprecedented levels.

Before we dive into why, let’s back up.

In the days following DeepSeek’s arrival, our experts Louis Navellier, Eric Fry, and Luke Lango urged investors not to bail on AI

While they believed the leaderboard could change slightly, they agreed that DeepSeek’s low-cost technology would be bullish for AI, not bearish, thanks to Jevons Paradox.

This economic principle suggests that AI at lower cost will result in more total AI spending, not less, because more companies will be able to pay for AI. So, while the cost-per-unit of AI could drop dramatically, total AI spend would explode higher.

Now, Jevons Paradox is happening. We are seeing certain AI costs drop dramatically, leading to greater demand.

But at the same time, the bleeding edge of AI technologies are still coming at a high price tag along with enormous energy demand. To understand why, it’s important to recognize that technology is moving away from traditional large language models (LLM); it’s now moving toward reasoning models and AI agents.

For a good explanation, let’s go back to the WSJ:

Reasoning models, which are based on large language models, are different in that their actual operation consumes many times more resources, in terms of both microchips and electricity…

DeepSeek caused a panic of sorts because it showed that an AI model could be trained for a fraction of the cost of other models, something that could cut demand for data centers and expensive advanced chips.

But what DeepSeek really did was push the AI industry even harder toward resource-intensive reasoning models, meaning that computing infrastructure is still very much needed.

So, how much more “resource-intensive” are these reasoning models?

Here’s Kari Briski, Nvidia’s vice president of product management:

On tasks like generating complex, customized code for developers, this AI reasoning process can take multiple minutes, or even hours — and can easily require over 100x compute for challenging queries compared to a single inference pass on a traditional LLM.

Back to the WSJ for how this is likely to affect overall demand:

In January, it appeared that the cost per token [of AI development] —in both computing power and dollars—would crash in the wake of the release of DeepSeek R1…

On its face, this would seem to indicate that AI’s future demand for computing power would be some fraction of its current amount—say, a tenth, or even less.

But the increase in demand from reasoning models…could more than make up for that.

If…reasoning models become the standard and increase demand for those models by a factor of 100, that’s still a 10-fold increase in future demand for power for AI.

This is just the starting point. As businesses are discovering that the new AI models are more capable, they’re calling on them more and more often. This is shifting demand for computing capacity from training models toward using them.

The WSJ goes on to profile a company that provides AI computing resources to other companies. Here’s its CEO commenting on AI costs and overall demand:

For one customer, we brought their costs down probably 60% six months ago, and within three months, they were already consuming at a higher level than they were consuming initially.

Bottom line: Unless your investment time horizon is less than a year or so (we’ll circle back to you in a moment), ignore the risk of a market correction. Diversify your picks (chipmakers, components suppliers, energy plays, and so on) but invest and then just hang on.

If you’re more risk averse, consider investing a small starter position from which you’ll dollar-cost-average over time (adding to your position in equal dollar increments at regular intervals going forward so that you average out your overall cost basis).

If you’d like help with which stocks to add to your portfolio, our macro expert Eric just identified several that are set to benefit from artificial general intelligence. They’re in his special reports: My 3 Top AGI Stocks for 1,000%Gains and The AI Dominators. To learn how to access these reports, click here.

I’ll wrap up this section with the following quote from Tomasz Tunguz, venture capitalist and the founder of Theory Ventures:

Every keystroke in your keyboard, or every phoneme you utter into a microphone, will be transcribed or manipulated by at least one AI.

And if that’s the case, the AI market could soon be 1,000 times larger than it is today.

How to remain in the AI trend if you can’t stomach the coming ups and downs

In Friday’s Digest, I noted that not everyone has a decade-long investment horizon.

Frankly, not everyone has a one-year investment horizon.

If you’re in that boat – or if you’re a more conservative investors – how do you invest in AI without too much exposure to market risk?

In Friday’s Digest, I highlighted an entry/exit timing tool from our corporate partner, TradeSmith. It uses historical market data to create a unique volatility thumbprint for any given stock.

This proprietary “Volatility Quotient” (VQ) reading helps investors know how much volatility is normal and to be expected. And that can inform an investor about when it’s time to get out of a position… and eventually, back in.

But you can use this VQ reading in a second way – to detail exactly how much money to invest based on your specific risk tolerance.

Circling back to today’s AI megatrend, let’s say you find a stock you want to buy, but you have a fixed amount of money you’re willing to risk losing. We can use the VQ reading again, yet with another tool – a Position Size Calculator.

Here’s TradeSmith’s CEO Keith Kaplan:

In our TradeSmith system, we offer something called a Position Size Calculator. It has three different scenarios for how to buy a stock.

1. You could say, “I want to risk $1,000; how much of this stock should I buy?”
2. Or let’s say you have a $100,000 portfolio. You could say, “I’d like to risk 2% of my portfolio; how much should I buy?”
3. And finally, you could say, “I want to buy this stock with equal risk to the stocks in my portfolio; how much should I buy?”

This tool is VERY user friendly, and it’s set to walk you through the perfect position sizing for your portfolio in less than a minute.

Based on the amount of money you’re willing to risk on an AI stock, the Position Size Calculator would tell you the exact position size to take relative to the unique volatility of your chosen stock.

Many investors don’t realize how much these details affect your market performance. Here’s Keith:

Your position size matters a LOT. Don’t get it wrong.

Don’t buy too much of a risky stock and not enough of a low-risk stock.

You must find (and keep!) the right blend to maximize your potential gains while lowering your risk.

Keith is holding a live event this Thursday at 8 PM ET that provides a walk-through of these TradeSmith market tools.

He’ll also introduce a new technological breakthrough, demoing it for the first time. This “MQ Algorithm” is designed to detect and model market melt-ups mathematically. And even though the market is selling off as I write, this MQ algorithm is signaling a melt-up for a subset of stocks.

From Keith:

To be clear, I do think now is the time to buy stocks – but you want to make sure you’re buying the right ones at the right time.

On Thursday at 8 p.m. Eastern, I’m going to share the biggest prediction in my company’s 20-year history. One that will likely have you eager to buy stocks as well.

It’s free to attend. All you have to do is register for The Last Meltup, right here.

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

Have a good evening,

Jeff Remsburg

Editor’s Note: Geopolitical uncertainty, tariffs, mixed earnings results, and stalled-out price action has been throwing a wrench into the works this year.

But our partners at TradeSmith couldn’t be more certain about what’s coming.

And what’s coming is the continuation of an epic melt-up that officially began in April of last year… and will likely only accelerate over the next 12 months.

Today, TradeSmith CEO Keith Kaplan is joining us today to brief you on exactly how they reached that conclusion… and the strategy he uses to take advantage of stocks in sharp downtrends.

Take it away, Keith…

They say you should never try to catch a falling knife.

That’s certainly true… if you’re doing it without a plan.

But if you do it with the right stocks, buying into a downtrend and banking on a reversal can be quite lucrative.

A couple months back, we got the idea of designing a system that’s like catching a falling knife with Kevlar gloves on… where we minimize the risk and trade only the rarest setups with a strong track record of working.

We tested tons of different variables, and eventually we found one combination that produces a rare but quite reliable trading signal.

By targeting quality stocks in sudden, steep downtrends… You can bank on a quick reversion to the mean that sends the shares much higher from your entry.

Why talk about it now?

First off, it’s about to go live in TradeSmith Finance for Trade360, Ideas by TradeSmith, and Platinum subscribers. We wanted folks to be ready to grab some serious gains, as TradeSmith is picking up an ultra-rare bullish signal in the markets right now that only comes around every few decades.

And that signal is really key to this whole strategy.

You see, our data shows that we’re in a rare kind of market that we previously only saw in 1996… and then 70 years earlier, in 1926.

If your market history is sharp, you know those were the early stages of massive investment manias that went far further and lasted much longer than anyone expected.

Both were powered by technological breakthroughs… financial institutions lowering the barrier for smaller investors to participate… and a consumer credit revolution that spurred the economy higher.

These are all things we’re seeing the beginnings of today. And what we’ve found is that these specific conditions signal the start of a “mega melt-up.”

In markets like this, stocks can post monumental gains, year after year.

For example, the S&P 500 rose more than 20% every single year from 1996 to 1999, until the bubble popped in September of 2000. The Nasdaq did even better, returning 42%, 20%, 83%, and 102% in that four-year period.

Individual stocks did even better, with companies like Microsoft (MSFT) returning more than 1,000%… Oracle (ORCL) returning more than 1,200%… and Amazon (AMZN) hitting a peak of 8,509% from ’97 to ’99.

But of course, every melt-up eventually turns into a meltdown.

That was true 100 years ago, as the Roaring  ‘20s gave way to the Great Depression.

And it was true 30 years ago, when the dot-com boom turned into a bubble and a bust.

But no matter if we’re in the boom, bubble, or bust phase of a melt-up, this strategy is perfectly suited to catching quick gains as stocks recover from quick sell-offs.

More on all this in a brand-new presentation later this week.

But today, let’s focus on the strategy…

How This New Strategy Delivers Rare, Powerful Gains

Setups from our new strategy don’t happen often, and they rarely happen in stocks with a low Volatility Quotient (VQ). For new readers, VQ is our measure of a stock’s individual volatility. The higher the score, the more volatile in the name – and vice versa.

That makes sense – high-quality stocks don’t tend to make big drops. The market rewards great businesses with higher share prices.

But every so often, a bad earnings report or a shock macro event can throw these stocks off their game. And that’s when we want to buy them.

We tested this new strategy on the S&P 500 going back 10 years.

Of the 339 cases we found – roughly a third of which were during the initial panic sell-off of March 2020 – just under 80% saw positive returns 21 trading days later. And the average return, counting wins and losses, was about 16%.

That’s a strong signal… with great returns for such a short period. It makes for a great swing-trading strategy.

Now, I can’t tell you the exact parameters of the newest version of this strategy. If I did that, anyone could go and set it up and trade it for themselves… which wouldn’t be right to our subscribers.

But I can show you a couple examples… like this one.

In our backtest of this strategy, we spotted a trade on Humana (HUM) during the pandemic crash.

The Snapback signal triggered on HUM at $206.99 on March 23, 2020. Buying it then and holding for the next 21 trading days probably sounded like a horrible idea at the time.

But you would’ve walked away with a 71.6% return as the stock recovered to $355.18:

This was the pandemic, though. A lot of stocks pulled moves like this.

Let’s look at a more isolated incident involving insurance company Globe Life (GL) from last year.

GL was the target of a short report that accused insurance fraud. The stock dropped more than 50% in a single session, and that was enough to trigger the Snapback signal on April 15 at a price of $55.52.

Twenty-one trading days later, the stock recovered to $88.10. returning 58.7%, as you see in the chart below:

Then there’s one of the cleanest examples I’ve found – a case from 2022, in Caesars Entertainment (CZR).

The signal triggered at $32.36 on Sept. 30… and would’ve led to a 35.5% gain if you’d sold it 21 trading days later (on Oct. 31) for $43.73:

These are some of the best performers the system found over the last 10 years.

To be clear, there were losers, too. But in our study, only one-fifth of the signals lost money.

So, I’m guessing you want to try it out?

Good news: There’s a live signal right now.

A Tradable Signal on FMC

Check out this chart of chemical manufacturer FMC Corp. (FMC):

On Feb. 11, this strategy flashed a new trade on FMC.

The rules are, the system were to have bought on Feb. 11 and held through March 13 (21 trading days). We’re a bit late to this trade, but it is currently the most recent signal in our system.

Luckily, the price hasn’t moved much. But it has trended a bit higher.

You could buy FMC on Monday and look to sell it as it reaches the average gain the system achieved in our backtest – about 16%. Even now, that’d be a very respectable return for the remaining 12 trading days.

Now, it’s important to understand that FMC is currently in the Red Zone, meaning it would not (yet) be a candidate for a long-term buy and hold.

But we’re talking about something different here. We’re talking about trading FMC for a short time as it recovers from its beaten-down price, only 21 trading days.

We’ll be rolling this strategy out to our Trade360, Ideas by TradeSmith, and TradeSmith Platinum subscribers very soon. When we integrate it into TradeSmith, they’ll be able to see new entry signals on this strategy and follow along if they wish. We’re finally in another “Roaring ‘20s” for the stock market, and I expect there to be tons of really exciting opportunities as long as this melt-up persists.

Ahead of that launch, I’ll be holding a free demo where I’ll show how to find 10 “melt-up stocks” for the historic market conditions TradeSmith is picking up now. Click here to save your seat for my Last Melt-Up event on Thursday, Feb. 27, at 8 p.m. Eastern.

All the best,

Keith Kaplan

CEO, TradeSmith

Frequently Asked Questions (FAQs)

Another day, another crazy roller-coaster ride for the stock market…

This has been the trend since Halloween. 

That is, in November, the S&P 500 rose 5.73%, achieving one of its best months in a year on optimism about potential deregulation and tax cuts under the Trump administration.

Then, as investors began to fear that the U.S. Federal Reserve wouldn’t cut interest rates anymore, stocks crashed 2.5% in December. It turned out to be one of their worst months in a year. 

As we moved into 2025, stocks rebounded throughout January and early February thanks to renewed economic optimism… 

But they’ve since crashed over the past few weeks as uncertainty about tariffs, federal spending cuts, and an economic slowdown weighs heavy on Wall Street. Indeed, since Feb. 10, the S&P has slid nearly 1.2%. 

Stocks have swung violently higher and lower many times over the past several months. In that time, we’ve seen just 5% gains in the S&P 500 and a negative return from the small-cap Russell 2000. 

Is this intense volatility Wall Street’s ‘new normal’?

It may be… 

A Bumpy Ride Higher?

Don’t get me wrong; I still think stocks are going higher in 2025. 

Despite renewed concerns about inflation and a consumer spending slowdown, the economy still appears to be on stable footing. It should benefit from deregulation and maybe even tax cuts over the next few months. Plus, the AI Boom remains alive and well, which should continue to create growth through the economy. 

We’re also nearing the end of the fourth-quarter earnings season, and broadly speaking, it was a strong one.

As we mentioned in a recent issue on earnings, more than 75% of the companies in the S&P 500 (as of Feb. 18) have beaten Wall Street’s profit estimates, meaning they made more money last quarter than analysts expected. 

Meanwhile, the blended earnings growth rate is nearly 17%, which marks the index’s highest profit growth rate since 2021.

And trends are expected to stay strong for the foreseeable future. That is, next quarter, earnings are projected to rise about 8%, then another 9% in Q2. They are expected to rise almost 15% in the third quarter and about 13% in the fourth.

In other words, corporate earnings should keep rising for the rest of the year. Stock prices should follow suit. 

However… I don’t think it’ll be a smooth ride higher…  

Largely because of U.S. President Donald Trump.