Archives May 2025

Stocks were buoyed Thursday by a U.S.-U.K. trade agreement, the first deal to come out of a month of negotiations. Now the question is: Can future deals continue to impress Wall Street? 

The U.S. and U.K. announced a trade deal framework yesterday that eases automobile, steel, and aluminum tariffs, and opens the British market up to an estimated $6 billion of U.S. goods. The deal also included a commitment by a U.K. airline to purchase more than $10 billion worth of Boeing (BA) jets, an acquisition announced by British Airways parent IAG on Friday. 

The framework leaves in place a 10% tariff on all imports, a sign to some that the baseline rate isn’t going anywhere.

US and China to Begin Talks This Weekend

“If the 10% global tariff is here to stay, the only other major tariff relief could come from a de-escalation with China,” Michael Pearce, Deputy Chief U.S. Economist at Oxford Economics, wrote on Thursday.

American and Chinese officials will meet in Switzerland this weekend to hold their first talks since the onset of their tit-for-tat trade war.

The stakes are high. Shipments from China to the U.S. reportedly slumped more than 20% in April after Trump raised tariffs by more than 100%. Treasury Secretary Scott Bessent has called current rates “unsustainable” and said the world’s two largest economies have effectively embargoed each other. Trump on Friday floated the idea of lowering duties on Chinese goods to 80% from a maximum of 145% today. 

Does UK Deal Bode Well for China Talks?

The U.K. “deal was low-hanging fruit,” Pearce wrote. The U.S., he notes, runs a trade surplus with the U.K., meaning Britain never was subject to the “reciprocal” tariffs announced on April 2. The two countries also have a long history of cooperation.

It will be much harder to develop a similar framework with China, considering both the scale of trade and the animosity between the two parties. Given the challenges, “we are sceptical that tariff relief is on the near-term horizon,” Pearce said. 

Trump has said this weekend’s talks with China could be “substantive,” but the scope of the U.K. deal could temper Wall Street’s expectations. “Tellingly, the deal did not touch on more contentious issues, such as opening healthcare markets to US providers or the UK’s digital services tax,” Pearce wrote. That could signal that “other countries will be unwilling to offer significant politically difficult concessions in return for minor tariff relief.”

Economists at middle-market consultancy RSM dubbed Thursday’s framework “the U.S.-UK trade agreement that isn’t.” They called the framework “neither comprehensive nor complete,” and said it “does not provide the clarity necessary to lift the fog of uncertainty.”

A U.K. trade deal may be a cakewalk compared with China, but it’s still “an important test case and a model for what could be accomplished,” says Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management. “If the administration can follow this up with additional agreements, it would go a long way toward healing a stock market that has been battered and bruised this year.”

When the markets are dropping and your portfolio is falling with it, the instinct is to sell everything, cut your losses, and stick with cash. However, history shows that remaining invested is the best choice over the long run. Volatility is normal. Stocks undergo intra-year declines of about 16%, yet generate positive calendar-year returns around 80% of the time, demonstrating resilience.

Panic selling is rarely the smart move. So, before you consider pulling your money out, it pays to understand how a disciplined approach can help you achieve long-term gains.

Understanding Market Volatility

Significant volatility in the market refers to the stomach-churning ups and downs of stock prices that can cause even seasoned investors to question their strategies. These swings happen when new information hits the market—surprise earnings reports, economic news, or global events that make investors rethink what companies are worth. A low-volatility asset experiences minimal movement, while a high-volatility asset can see significant daily swings.

While the word “volatility” is heard most often when the market is swinging wildly, it’s a regular occurrence—like waves in the sea. Every significant downturn in U.S. history (thus far) has been followed by eventual recoveries. Those who keep their investments during these periods often achieve the best results in the long run.

The Risks of Pulling Your Money Out of the Market

Selling investments during a downturn locks in losses and eliminates the chance to benefit once the market recovers. Retail investors often do the exact opposite of the buy-low, sell-high maxim—selling after sharp declines and missing the market’s strongest rallies.

Moreover, timing the market requires getting it right twice: when selling and when you buy, a risky strategy even for seasoned professionals.

Historical Recovery Periods

Since 1929, the average length of a bear market in the U.S. has been around 11 months, so they typically last less than a year, even if the stress and drama of them lasts far longer. They occur about once every five years, so they are also not unusual—the last one was in 2022, with swings in April 2025 coming close.

Two Important Strategies To Prepare for Bear Markets

Diversifying across different asset classes, sectors, and geographies helps mitigate the effects of poor performance in any one stock or asset type. Bonds and alternative assets like commodities tend to behave differently from equities, which helps stabilize a portfolio when stocks drop. 

Dollar-cost averaging is another smart strategy that involves investing fixed amounts at regular intervals—putting a percentage of each paycheck in your 401(k) is an example of this—that helps avoid timing while also ensuring you are buying during periods of lower prices.

Your Age Should Help Inform What To Do

Young people can afford to stay invested in equities thanks to their longer time horizons, which allow them to ride out short-term swings. Essentially, the younger you are, the less you need to worry about a bear market.

Retiring during one, however, creates genuine risk because of sequence-of-returns problems—withdrawing from declining investments can permanently damage your portfolio’s long-term value. If you’re within five years of retirement, consider building a cash buffer covering one to two years of expenses and gradually shift toward more conservative allocations using a rule of thumb like the “100-minus-your-age” rule (e.g., 40% stocks/60% bonds at age 60).

When Selling May Be Necessary

While panic selling is typically unwise, there are real problems you might face that require you to pull out funds from your investments—a job loss, medical emergencies, or other financial hardships.

In these situations, consider selling only what’s absolutely necessary, starting with bonds, other stable assets, and stocks most unlikely to make gains in a rebound. You begin with these since they aren’t going to increase in value as much as, say, your shares in a tech stock.

The Bottom Line

Panic selling often exacerbates losses and derails financial goals. While volatility can be unnerving, it is a routine feature of markets. Stay invested and disciplined—and resist the temptation to pull out entirely.

Tom Yeung here with today’s Smart Money. 

Car designers all know it’s hard to have everything all at once.

In 2011, Nissan attempted to produce the world’s “first all-wheel drive crossover convertible.” It combined a sedan, SUV, and sports car into a single vehicle.

When designers add too much to a single car 

The result was the Murano CrossCabriolet – a vehicle so terrible it won CNN’s award for the “most disliked car” of the year. Car and Driver magazine noted the SUV portion added weight and height that caused a “frightful lack of grip.” Meanwhile, a reviewer at the Jalopnik website noted how the convertible aspect meant you “can’t see anything smaller than a fire station” with the top raised.

Nissan discontinued the car several years later.

Investing is usually the same way. Everyone knows that 1) high growth, 2) high-profit companies bought at 3) low prices are the key to success.

Warren Buffett bought Apple Inc. (AAPL) in 2016 when it was trading for just 11X forward earnings. It eventually netted his firm $120 billion in profits.

Eric helped his readers gain 1,350% in only 11 months from another “triple threat” firm back in 2021 – copper and gold miner Freeport-McMoRan Inc. (FCX).

But it’s hard to find “triple threats” like Apple and Freeport that combine these three things into a single package. Most firms usually only satisfy one of the three criteria (or two if you’re lucky). And those fulfilling all three often have something terrible going on beneath the surface.

That’s why finding these triple-threat firms is one of the greatest joys in investing. It’s that “aha” moment when you realize why markets are completely wrong about a stock.

And it’s why Eric recently recommended to his Fry’s Investment Report members a company that embodies all three criteria. It’s a fast-growing AI stock that’s so high-performing that, as Eric says, if we pulled a brown bag over its logo, so that we did not know the company’s identity, its raw performance would be enough to tempt anyone to buy in.

But, before we get into this company, let’s consider some other AI firms that illustrate why finding these triple threats is so hard…

The “Single” Threat

Most AI stocks are much like Xometry Inc. (XMTR), a firm I recommended last March in the InvestorPlace Digest e-letter. Though shares of the company have since risen 20% (a splendid return by any measure), it only covers one of the three triple-threat criteria (growth) that top stocks should have.

Xometry is a 3D printing marketplace that uses AI software to match customers with producers. A small firm looking for a half-dozen parts can log onto Xometry’s site and get an instant quote for the order, no matter how complicated the piece might be. Even large customers benefit, since the digital marketplace can channel bulk orders to the cheapest producers.

That’s turned Xometry into a hypergrowth firm. Net profits are expected to flip from negative $2 million to positive $13 million this year, and then double twice over the next two years.

However, these fast-growing companies usually lack quality and value… and Xometry is no exception.

• Quality. Xometry has generated losses since its 2021 initial public offering, making it a tough company for conservative investors to swallow.
• Value. Shares trade at 110X forward earnings, more than five times the S&P 500 average.

That makes the Maryland-based firm a bit like a Maserati GranTurismo: a beautiful sports car, but one with a high price tag and significant reliability issues.

So, what does a “double” threat look like instead?

Two Out of Three

That brings us to Arm Holdings PLC (ARM), a British chip designer whose TK market share makes Nvidia Corp.’s (NVDA) 90%market share in GPU-embedded servers seem low.

Arm is a 35-year-old firm that runs 99% of all smartphone CPUs. It has pioneered supremely power-efficient chip architecture, and its designs are a “must-have” wherever energy is at a premium. That includes virtually any battery-powered electronic device, such as laptops, Internet of Things (IoT) devices, and self-driving cars. Its designs are also increasingly found in data centers to help reduce power consumption.

The “must-have” nature of Arm’s architecture has translated into generous royalty payments… at least for Arm and its shareholders. Its latest v9 architecture charges a 5% fee on final sale value on top of regular licensing fees. So, if Apple sells an iPhone 16 Pro for $1,199, 5% of that higher value (rather than the lower $485 cost of building the phone) goes straight to Arm. The British firm generates over 40% returns on invested capital.

Arm’s AI ambitions have additionally turned the company into a hypergrowth firm. It is pushing ahead with power-efficient AI accelerators for both battery-powered devices and servers, and analysts expect profits to rise 25% on average over the next three years.

However, this great news comes with an eye-wateringly high price tag, making the stock prone to selloffs. Shares trade at 61X forward earnings (despite having a slightly slower growth rate than Xometry).

By that metric, it’s twice as expensive as Nvidia.

Indeed, Arm’s stock plummeted 12% on May 7 despite an earnings beat, because management forecasted that sales would “only” grow 12% next quarter to $1.05 billion. (It has since regained two-thirds of that selloff.)

That’s why neither Eric nor I recommend shares of this high-priced AI “supercar.” It’s simply too expensive in this current market.

The “Real” Triple Threat

So, what does a company that “has it all” look like?

Consider Corning Inc. (GLW), a current holding in Fry’s Investment Report.

Corning is an upstate New York firm that’s developed high-end glassware since 1851. It invented Pyrex in 1915, low-loss fiber optic cable in 1970, and the iPhone’s “Gorilla Glass” in 2007.

Today, the firm is a leader in liquid-crystal display (LCD) panels, smartphone screens, and the fiber optic cable used in broadband connections. It’s an upmarket manufacturer that’s survived outsourcing and offshoring thanks to decades of innovation.

Perhaps most excitingly, Corning also manufactures the high-end fiber optics used in data centers to link servers. This essential technology allows AI-focused data centers to send more data across tighter spaces. It’s become one of Corning’s greatest growth drivers.

Meanwhile, Corning’s profitability is excellent. The company has earned positive operating earnings for the past two decades (even through two recessions), and analysts expect return on equity (ROE) to surge to 17% this year – roughly twice as high as market averages. Corning’s shares additionally trade at just 19X forward earnings – below the S&P 500 average of 20.2X.

Now, you obviously might think there must be something wrong. How can a firm have it all without secretly being a Murano CrossCabriolet? And you’d be right to worry.

Corning supplies many of the world’s top TV makers, which are now facing enormous tariffs on exports to the United States. Public funding for broadband expansion may also get cut in the upcoming federal budget. Both factors have contributed to a 15% selloff since February.

However, it’s becoming increasingly clear that the market’s “sell first, ask questions later” approach has turned Corning into an irresistible “Buy.”

Ninety percent of its U.S. revenues are generated by products made in America, and 80% of its sales in China are made in China. The direct impact of tariffs should remain under $15 million – a rounding error relative to Corning’s $2.8 billion in expected pretax profits this year.

Corning also plans to create the first fully U.S.-made solar module supply chain. If successful, the project could help solar firms sidestep incoming tariffs on solar cells that could be as high as 3,500% if the U.S. International Trade Commission agrees with the Commerce Department’s proposals this June.

One More Triple-Threat Company

Corning’s data center connectivity products only nibble at the edges of the AI revolution. Eric’s other pick, the “brown bag” buy we mentioned earlier, is right in the center.

As Eric wrote in a recent Smart Money…

This “brown bag” buy competes directly against Nvidia Corp. (NVDA) in an industry that is brutally competitive and deeply cyclical. Because of factors like these, investors have been dumping the stock for months, despite the company’s superb operating performance and bulletproof balance sheet.

The company’s core operations are making rapid gains, especially its fledgling data center division. This critical division is growing at a blistering pace. Last year, its revenues nearly doubled and accounted for half of total company revenue.

In fact, Nvidia was almost bought by this forward-looking firm in the early 2000s.

The company is a major supplier of cutting-edge semiconductors, and it has very profitably become a major player in many facets of AI technologies.

And the company’s current share price has become too compelling to ignore.

You can learn how to access all about th8is “have it all, triple-threat” – and many of Eric’s other triple-threat plays – in Eric’s free, special broadcast.

You can click here for all of the details.

Until next week,

Tom Yeung

Markets Analyst, InvestorPlace 

Many Americans are in a tight spot: Average credit card debt has topped $7,300, and nearly two-thirds say it’s delaying major life decisions. One option is to prioritize paying off that debt over 401(k) contributions. But skipping 401(k) contributions means missing out on long-term growth and, for many, ‘free’ money from their employers.

So should you pay off credit card debt first or invest for the future? Below, we explain the tradeoffs and help you choose a strategy that fits your situation.

Understanding the Dilemma

Credit card interest can eat away at your finances, but stopping retirement contributions means missing out on compounding growth and, for many, employer matching contributions. The “right” answer depends on whether your employer does match your contributions, and, to a lesser degree, your age and amount of credit card debt.

For someone in their 20s, the power of compounding in a retirement account is enormous. But so is the cost of indefinitely carrying high-interest debt, particularly for outsized debt. Making the right call means looking closely at the numbers.

An ‘Average’ Scenario

To approach the problem, let’s make the following assumptions, based roughly on national and historical averages:

• Credit card debt: $7,500
• Credit card interest rate: 20%
• Annual salary: $60,000
• Employee 401(k) contribution: 5% of salary
• Employer 401(k) contribution: 5% of salary
• 401(k) annual return: 6.5%
• Additional credit card spending: None

When It Makes Most Sense to Focus on Your 401(k)

In most cases, maintaining retirement contributions makes more long-term financial sense if your employer is matching all or part of your contribution. And the younger you are, the more compelling the argument for prioritizing your 401(k).

Consider this: In the scenario above, the employer match alone would be $3,000 a year, which dwarfs the roughly $1,700 in annual interest you’d pay on the $7,500 in credit card debt. And that’s before considering the compounded annual returns and any tax benefits from the contribution. If you redirected $250 a month from your 401(k) to your credit card, thereby losing the $250 employer match, it would cost you roughly $110,000 in compounded gains in your 401(k) over 30 years.

When Your Employer Doesn’t Match

On the surface, the choice looks different if your employer isn’t matching any of your 401(k) contribution. In that case, you’d be paying 20% interest on the $7,500 in credit card debt, versus gaining 6.5% a year on any money you put in your 401(k). Simple, right?

Not exactly. Again, that doesn’t take compounding into account. Let’s consider:

• You divert $3,000 a year from your 401(k) to your credit card
• At that rate, you pay off $7,500 in about 42 months at a total cost of about $10,500.
• Alternatively, if you pay your credit card minimum each month (interest plus 1% of principal, or $25 a month, whichever is greater), you could pay it off in about 17 years at a total cost of about $18,000.
• But at 6.5%, the $10,500 you spent paying off the credit card would be worth about $28,000 after 17 years if you had made contributions to your 401(k) instead.)
• After 30 years, that $10,500 would be worth about $69,000.

Credit card interest can be brutal. It’s always a good idea to pay off the balance. But not necessarily by diverting money from your retirement account. It’s better to look for almost any other way to do so first. Of course, the closer you are to retirement, and the fewer years of compounding ahead of you, the more it might make sense to divert some 401(k) contributions—again, assuming you’re not getting an employer match.

Balancing Priorities

Another option is to split the difference, diverting half of your normal 401(k) contribution to paying off the credit card. The math still holds—over the long term, it’s probably better to put all of the money into your retirement account.

Bottom Line

Paying off your credit card can offer peace of mind, improve your credit score, and free up cash later for additional saving and investing. If the debt feels like a dark cloud hanging over your finances, eliminating it can bring emotional as well as financial relief. But think carefully and crunch the numbers before you decide to divert money from your retirement account.

Federal funding plays a critical role in supporting colleges and universities across the country. Many schools rely on federal funding for student aid as well as for research and development. A reduction or elimination of federal funding can have devastating effects on the college or university in question.

The Role of Federal Funding in Higher Education

In the United States, education is predominantly the responsibility of state and local governments, which includes contributing the majority of education funding. However, while the U.S. Department of Education is prohibited from mandating curriculum, it can still provide additional financial support at all school levels.

The Department of Education funds K–12 programs that help economically disadvantaged schools. These include Title I, special education programs, and school improvement programs.

The department supports colleges and universities through Pell Grants, which provide funds to financially disadvantaged students; federal student loans, which typically offer more generous terms than their private counterparts; work-study opportunities; and funding for research and development.

Implications of Losing Federal Funding

Any loss of federal funding can have severe consequences for schools, students, scientific research, and local economies. Colleges and universities that have their federal funding cut may be forced to raise tuition rates, reduce or delay access to financial aid, and/or lay off staff.

Additionally, not only does freezing research grants halt potential advancements in crucial fields, but it also makes related careers less viable. Some universities have accepted fewer graduate students amid pathways to career-building projects and graduate programs being cut off.

According to an analysis from the Associated Press, nearly 100 colleges and universities were under investigation by the Trump administration for programs that it alleged were illegally promoting diversity, equity, and inclusion or failing to combat purported antisemitism at student protests against Israel’s war in Gaza.

Those schools, which include Ivy League institutions like Columbia University, collectively received over $33 billion in federal funding in the 2022–2023 academic year, not including what was provided for federal student aid. Of particular note is that $400 million worth of federal research funding for Columbia University was canceled, which has yet to be restored despite the school largely acquiescing to the administration’s demands for reinstating it. Nearly 180 Columbia staff members were laid off on May 6 as a result of the ongoing funding freeze.

The Bottom Line

The federal government has played a key role in ensuring U.S. colleges and universities have adequate funding to support students as well as critical research. However, when federal funding is reduced or eliminated, schools may have to cut vital programs, staff, and student services.

On March 11, the United States Department of Education announced it was cutting nearly half its workforce, including staff from its Vendor and Program Oversight Group, which is responsible for overseeing federal student loan servicers. This could be bad news for student loan borrowers. In addition to having less support should you have questions about your debt, you may also have fewer options for recourse if a servicer mishandles your loan.

What Was the Vendor and Program Oversight Group?

The Vendor and Program Oversight Group was a sub-office nestled multiple layers within the Department of Education’s organization. Here’s where it fit: Within the Education Department is the office of Federal Student Aid, under which is the Office of Student Experience and Aid Delivery, of which the Vendor Oversight and Program Accountability Service is a primary directorate, which oversaw the Vendor and Program Oversight Group.

According to the Department of Education, the Vendor and Program Oversight Group made sure loan servicers—third-party companies contracted to manage billing, repayment, and customer service for federal student loans—meet performance standards and comply with federal requirements.

Impact on Student Loan Borrowers

While the full impact of the Vendor and Program Oversight Group layoffs remains to be seen, it doesn’t bode well for those with student loan debt. 

Many borrowers are already overwhelmed by a confusing and ever-changing student loan landscape. With less government oversight, student loan servicers may face fewer consequences for administrative errors—or even misconduct—such as overcharging borrowers or cutting back on customer service to lower costs. As a result, borrowers could experience worse service, including longer wait times and less support when they have questions.

Student loan borrowers in low-income communities could be hit particularly hard. For those struggling to repay their student debt, a lack of government resources and loan servicer support may lead to an increase in defaults, exacerbating what has already been called a student loan crisis.

The Bottom Line

The recent cuts to the Education Department’s oversight team signal a troubling shift for student loan borrowers, as this could undermine the accountability and quality of service that borrowers are entitled to from their servicers. Without strong institutional expertise and resources, borrowers may face longer wait times as well as a higher risk of loan mismanagement and default.

Editor’s note: “Stay Ahead of Stock Market Volatility With An Outperforming Strategy” was previously published in February 2025 with the title, “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. 

In that time, as we outlined in yesterday’s issue, we’ve seen:

• One of the fastest 10% drops in market history
  • Following the announcement of the “Liberation Day” tariffs on April 2, the S&P 500 sharply declined, dropping over 12.1% in the subsequent four sessions.
• One of the worst two-day crashes
  • On April 3-4, the market suffered a 10.5% setback, marking the fourth-worst two-day stretch since 1950.
• One of the best single-day rallies
  •  Following President Trump’s announcement of a 90-day pause on recently implemented tariffs, the S&P surged 9.5% on April 9, marking its strongest one-day performance since October 2008.
• One of the best win streaks
  • On May 2, the S&P locked in its ninth straight day of gains – the longest winning streak in more than 20 years – rising roughly 10% over that stretch
• One of the highest readings for the volatility index
  • The CBOE Volatility Index (VIX), often referred to as the market’s “fear gauge,” nearly doubled over six months, reaching a reading of 27.86.

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, 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.

The result? Stocks have been soaring for two years. 

From its lows in October 2022 to its peak in early February, the S&P 500 surged more than 70% higher. That is a stellar rally. And it was powered by two consecutive years of greater than 20% gains across the market. 

The S&P 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 index rallied more than 20% in back-to-back years. 

We were unequivocally in a stock market boom. 

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

On March 21, President Trump announced that the United States Department of Education’s portfolio of student loans would be transferred to the Small Business Administration (SBA). Moving this portfolio, currently totaling nearly $1.7 trillion, means that federal student loan borrowers would be making payments to and relying on the SBA for support. 

While Trump said the transfer would take place “immediately,” the change would first require Congressional approval. Meanwhile, the move could ultimately make it harder for borrowers to manage their loans, especially given that the SBA also announced on March 21 it would cut 43% of its staff.

Background on SBA and Student Debt

As the name implies, the Small Business Administration (SBA) provides services to small businesses, including by backing business loans offered through partner lenders. The SBA was also tasked with handling COVID-19 relief programs; as a result, it went from managing a portfolio of $143 billion pre-pandemic to administering over $1.2 trillion in aid.

Yet the COVID Lending Programs were rife with issues, including an estimated $200 billion in suspected distributions to fraudulent recipients. Part of the issue may have been that the SBA lacked sufficient capacity to handle the new workload, with the agency having to quickly hire contractors for processing and underwriting support. However, contractor errors, such as failing to verify bank account and address information, may have contributed to tens of billions in fraud.

Challenges Facing the SBA

Considering the SBA already struggled to manage pandemic-era relief, giving it an even larger amount of money to oversee while cutting 43% of its staff could prove to be logistically challenging.

Even if the SBA were sufficiently staffed, its employees likely wouldn’t have prior experience managing the different student loan programs and repayment plans. This inexperience may introduce a greater risk of payment errors and longer wait times for those seeking customer support. Some borrowers may even have their monthly payments and/or interest rates erroneously raised, or their payments might be incorrectly recorded and their credit harmed.

“This can only result in borrowers experiencing erratic and inconsistent management of their federal student loans. Errors will prove costly to borrowers and, ultimately, to taxpayers,” said Jessica Thompson, senior vice president of the Institute for College Access & Success (TICAS), in a statement.

The Bottom Line

While it’s difficult to say exactly what will happen if the federal student loan portfolio is transferred to the SBA, there’s a reasonable concern that the agency currently lacks sufficient staff and experience to adequately administer such a large amount of debt.

The Trump administration may overcome these potential stumbling blocks by switching federal student loans from a direct lending model to one where loans are guaranteed by the government but issued by private lenders, similar to how the SBA handles the bulk of its business lending. If that’s the direction the government decides to go, it could also mean the end of certain benefits of federal student loans, such as access to debt forgiveness and discharge programs.

A product is emerging that is so powerful, it is already threatening trillion-dollar companies.

And almost no one is using it yet.

That’s the dynamic we saw play out this week.

This week, Apple executive Eddy Cue testified in the Justice Department’s antitrust case against Google owner Alphabet. According to news reports, Cue testified that Apple is “actively looking at” adding AI as an alternative to search.

The reason why is in the numbers. Searches on Apple’s web browser Safari fell for the first time last month, he said. Cue said the decline was caused by users increasingly relying on AI, according to Bloomberg News. Google pays an estimated $20 billion annually to be the Safari default search engine.

On Wednesday, Alphabet shares closed down 8% on the news.

We’ve written plenty in the Digest about AI and why it’s going to be a major disruptor to every industry sector, including big tech.

But that’s only half the story this week.

You may have heard predictions about how AI will change the American workplace. In March, Microsoft founder Bill Gates predicted that advances in AI will render humans unnecessary for most things in the world.

But we’re not close to that … yet.

Recently, abundance of news stories and surveys make it clear that very few American workers are using AI.

A Pew Research survey published in February found that only about 16% of American workers are doing at least some of their jobs with AI.

Another 63% say they don’t use AI much or at all in their job; and 17% reported that they have not heard of AI use in the workplace.

What’s the takeaway?

We’re still very early in the AI megatrend … but the future is coming at you fast.

No Turning Back From the AI Revolution

Quotes like the one from Gates above make good headlines and often frighten people about the future.

But as the Pew Research survey shows, we’re nowhere near the point of mass adoption of AI tools.

Investors such as Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, have warned that an “AI bubble” will burst like the dot com bubble. Jeremy Grantham, co-founder of investment management firm GMO LLC, who famously predicted the dot-com bubble burst, has said it will likely “deflate.”

Those outcomes may happen. But one thing is certain…

The non-AI economy is disappearing.

You can either invest in it or be left behind.

Our own in-house investing legend Louis Navellier makes a similar point to his Growth Investor subscribers.

When ChatGPT launched, the AI tool could only answer questions based on its training data, which was up to September 2021. Plus, it had a bad habit of making up facts when it didn’t know the answer – what we now call AI “hallucinations.”

Still, it was a revolutionary tool. More than 1 million people used ChatGPT in the first five days.

And the world hasn’t been the same since.

Fast-forward to March 2023, when GPT-4 rolled out. The AI tool could pass the bar exam, scoring in the 90th percentile. According to some studies, it could also pass medical exams, outperforming med students with ease.

The growth and acceleration of AI have only continued since then. And today, we find ourselves at a moment I call the Economic Singularity.

This is the moment when AI crosses a threshold and makes most human labor economically irrelevant.

Regular Digest readers know that Louis is a classic “quant.” He uses data and high-speed computers to identify fundamentally superior stocks that have the institutional buying pressure to push them higher.

So, when he selects stocks in a megatrend, it’s based solely on data – not hunches or gut-feels.

A good example came this week with earnings announcements from AppLovin Corporation (APP).

If you don’t know the stock, APP targets the more than 1 billion people who play mobile games. Specifically, the company owns and operates an AI platform that provides advertising to mobile gamers.

The ads aren’t just for other games. Their AI platform is now expanding into broader industries such as e-commerce, fintech, healthcare and entertainment.

And they posted blowout earnings this week. Here’s Louis writing in Growth Investor:

Shares of AppLovin Corporation (APP) soared higher on Thursday after the company posted blowout earnings and revenue for its first quarter. Total revenue increased 40% year-over-year to $1.48 billion, besting estimates for $1.38 billion. Advertising revenue jumped 71% year-over-year to $1.16 billion

First-quarter earnings surged 144% year-over-year to $576.42 million, or $1.67 per share, compared to $236.18 million, or $0.67 per share, in the first quarter of 2024. Adjusted earnings per share came in at $2.38, topping estimates for $1.96 per share. So, AppLovin posted a 21.4% earnings surprise.

Click here to find out more about what Louis is calling the Economic Singularity.

AI Winners Beyond Tech Stocks

On Thursday, Bloomberg published a story about how the data centers that help power AI are increasingly in water-resource-scarce areas.

The data centers that help power AI need high volumes of water to cool hot servers, and, indirectly, to help generate the electricity needed to run the centers.

From the Bloomberg report:

Even before ChatGPT launched in late 2022, communities complained about data centers guzzling up millions of gallons of water every day from cities that didn’t have all that much to spare. The problem has only deepened in the years since ChatGPT kicked off an AI frenzy.

More than 160 new AI data centers have sprung up across the US in the past three years in places with high competition for scarce water resources, according to a Bloomberg News analysis of data from World Resources Institute, a nonprofit research organization, and market intelligence firm DC Byte. That’s a 70% increase from the prior three-year period.

The story goes on to detail how data centers and tech firms are starting to deal with the problem while acknowledging that demand is only going to grow.

This trend offers an investing example beyond the obvious demand for more data centers.

All investors want to grow their wealth, but often, the most successful investors identify opportunities based on future economic needs that come to fruition.

For example, most investors are familiar with the story of Levi Strauss. During the California Gold Rush, it wasn’t most miners who grew wealthy—it was Strauss, who sold them the durable pants they needed to mine the gold.

In today’s AI boom, Eric isn’t chasing the most obvious chipmakers. He’s looking deeper—at the water flowing through the server farms—and not long ago, he made an important tech-adjacent call.

Eric noted in his New Manhattan Project report in Eric Fry’s Investment Report that water handling businesses have a tailwind based on this new technology, as well as in an old one.

Here is what he wrote about his pick, Aris Water Solutions Inc., (ARIS):

ARIS is an emerging leader in the water-handling business for the oil & gas industry. As I detailed in the October issue of Fry’s Investment Report, Aris has developed an extensive water infrastructure in the Delaware Basin of West Texas.

The company also has permits in place to expand the scope of its operations significantly. This growing network of water-handling facilities is generating solid earnings growth for Aris.

But the company’s growth curve could ramp higher over the coming years, thanks to a prospective, new “data center alley” in West Texas. Since data centers require prodigious volumes of water to cool themselves, Aris’ advanced water treatment capabilities could attract robust demand from the tech companies that might build centers in the region.

This is a great illustration of the global macro investing perspective Eric has. He leans on the world’s megatrends, but his focus is narrow. It’s not enough to simply say “invest in AI.” Eric considers all the economic/investment ripples originating from the trend.

ARIS is up 25% since Eric picked it in October, even amid the market volatility.

Eric believes that, like the Manhattan Project, the AI race is a high-stakes competition to develop a powerful technology of weaponization. And, like the Space Race, it’s also a race to control a limitless frontier.

Here’s Eric describing the stakes.

The stakes could not be higher. AI is a technology that has the potential to create, or destroy, on a scale that humanity has never before encountered. That’s why the U.S. will be pursuing an all-hands-on-deck strategy to master AI’s capabilities before anyone else does.

That’s why I believe we’re about to see a massive partnership between the U.S. government and the private sector that could shower the AI industry with trillions of dollars in new investments.  

You can learn more about Eric’s stocks for the New Manhattan Project by clicking here.

AI isn’t everywhere yet, but adoption rates are rising.

Savvy investors will want to get in early to ensure they can maximize their returns and not get caught flat-footed when mass adoption occurs.

Enjoy your weekend.

Luis Hernandez

Editor in Chief, InvestorPlace

Early Entry, Long-Term Potential: Why Pre-Sales Matter More Than Ever

Major crypto pre-sales provide investors with a great chance of acquiring early access to new tokens at drastically reduced prices. In 2025, two standouts are redefining what early access is in the world of decentralized finance and blockchain gaming, DexBoss on $DEBO and AurealOne through $DLUME.

The projects offer not just speculative upside, but also actual utility and long term use cases.

DexBoss: The Bridge Between Centralized and Decentralized Finance

DexBoss is carving a niche for itself within the decentralized finance (DeFi) ecosystem by bringing trading within reach of both beginners and professionals. The platform’s ultimate mission? To act as the go-to point of contact between traditional finance and blockchain-based alternatives.

Tools Built for Every Level of Crypto User

DexBoss is equipped with features that make it easy and powerful to trade: 

• User-friendly interface to remove confusion and facilitate adoption.
   
• More than 2000 different supported cryptocurrencies, including stablecoins and meme tokens.
   
• Solid liquidity pools to reduce slippage.
   
• Higher-level features such as margin trading, staking, and yield farming.
   
• High-speed order handling in high-volatility situations.

$DEBO Token: Fueling the DexBoss Ecosystem

The utility token of Dexboss, $DEBO, is used across the platform. The presale is divided into 17 successive stages, starting at $0.01 and ending at $0.0458, with a 1 billion capped token supply. Currently trading at $0.011, $DEBO is to go public at $0.0505.

A key differentiator? The platform takes advantage of trading fees for carry outs and token burns (reducing supply and increasing scarcity).

DexBoss Roadmap: What’s Ahead in 2025

• Q1: Launch of presale and initial marketing
   
• Q2: Public exchange listings and live platform launch
   
• Q3: Margin trading rollout
   
• Q4: Expansion of Fiat on-ramps and advanced tools

Why DexBoss Has Breakout Potential

• Built-in scarcity model with token burns
   
• Massive asset support appeals to a wide audience
   
• Simplified fiat onboarding improves accessibility
   
• Institutional-grade tools support larger traders

How to Buy $DEBO in the DexBoss Presale

1. Set up a crypto wallet (e.g., MetaMask, Trust Wallet)
    
2. Fund your wallet with BNB or USDT (Binance Smart Chain)
    
3. Visit the DexBoss presale portal: [Insert link]
    
4. Connect your wallet to the site
    
5. Choose how much $DEBO you want to buy and complete the transaction
    
6. Your purchased tokens will be available for claim after the presale ends

AurealOne: Powering Next-Gen Blockchain Gaming

AurealOne is a dedicated blockchain solution for gaming and metaverse economies, developed to address common blockchain riddles such as slow transactions, high gas, and digital currency’s poor gamification.

Gamer-Centric Design with Dev-Ready Infrastructure

Offering extremely fast and scalable blockchain infrastructure, AurealOne utilizes zero-knowledge rollups. The platform is optimized to provide non-stop performance in the game, even in stressful network connections.

Meet $DLUME: The Backbone of AurealOne’s Ecosystem

While $DLUME is more than a gaming token, it is the heart and soul of the entire AurealOne universe:

• Used for seamless in-game purchases.
   
• Grants reward and governance rights.
   
• Keeps costs low because of ultra-light transaction charges.
   
• AurealOne plays as a unified currency for all AurealOne games/ experiences.

DLUME Pre-Sale Snapshot

The $DLUME presale goes through 21 rounds, ranging from $0.0005 to $0.0045. At present, the token costs $0.0013, with the public listing expected to begin at $0.0055 or more.

Tokens are first distributed on the Binance Smart Chain (BSC) and then bridged to the native chain after the mainnet, effectively making them early adopters.

First Game Release: Clash of Tiles

It will be released in Q2 2025, and it will be the first demonstration of real-time capabilities of AurealOne. It will integrate native DLUME and be a technical proof-of-concept for further game development.

AurealOne’s Path Forward

• Q1 2025: Core blockchain completed
   
• Q2 2025: Alpha release of Clash of Tiles
   
• Q3 2025: Native token swaps and full network activation
   
• 2026: Expansion to more games and broader metaverse applications

Why DLUME Could Dominate the Blockchain Gaming Arena

• Built for modern games with fast, scalable infrastructure
   
• Real usage ensures long-term token utility
   
• Supply-reducing features like staking and governance
   
• Positioned to capitalize on gaming’s continued shift to Web3

How to Buy $DLUME in the AurealOne Presale

1. Set up a crypto wallet (MetaMask or similar)
    
2. Fund it with BNB (Binance Smart Chain)
    
3. Go to the DLUME presale site: [Insert official presale link]
    
4. Connect your wallet and select the amount of tokens
    
5. Complete the transaction
    
6. $DLUME will be delivered as BSC tokens, which can be swapped for native tokens once the mainnet launches

Final Word: Two Projects with Tangible Value and Growth Potential

DexBoss and AurealOne are not hype, they are solving real problems in DeFi and blockchain gaming. If you are into financial tools or next-gen gaming ecosystems, then $DEBO and $DLUME display strong fundamentals, hence early investment potential. The novelty of these projects makes them exceptional competitors for crypto giants like Bitcoin. This combination of emerging and established assets creates a balanced portfolio, offering both stability and strong growth potential.

As usual, invest wisely and keep in mind that crypto markets are volatile, early access may bring high rewards, but it also requires attention. ​

Disclaimer: The views and opinions presented in this article do not necessarily reflect the views of CoinCheckup. The content of this article should not be considered as investment advice. Always do your own research before deciding to buy, sell or transfer any crypto assets. Past returns do not always guarantee future profits.