For the past two years, semiconductor companies have been the big focus for AI investors. There are massive orders of chips needed to power today’s AI programs, with more demand down the line. However, stocks of leading chipmakers have already had a substantial move. Investors may fare better looking at other constituents of the AI market. That’s especially true for software companies, given that AI is ultimately a software, and that can provide higher margins for investors than hardware. For instance, software giant Adobe (ADBE) is down 20% over the past year. But growing cloud serv...

Markets tend to rotate over time. It’s a way to give a leading sector a break, while continuing an overall market trend. Recently, tech stocks have slowed significantly. But other sectors have taken over the lead. One potential winning sector in the months ahead is healthcare. A laggard last year, the space is starting to show some investor interest and signs of life. Investing in the sector trending higher makes for a simple momentum trade. Right now, healthcare-related companies appear to be coming out of their funk. The latest healthcare-related play looking better is CVS Health (...

The stock market is a complex interaction of several factors. And while the headline numbers for the stock market are still strong, behind the scenes, a rotation is underway. That rotation includes a shift away from high-flying tech stocks. Instead, other segments of the market are starting to show some strength here. That’s a good sign of a sector rotation underway, where different sectors take over the market lead. For instance, the healthcare sector was a poor performer in 2024. But it’s starting to show some signs of life, and is looking even better when measured against flatlini...

Over time, a company’s earnings are the key driver of its returns. However, many industries look at other metrics to determine the quality of earnings. Understanding these key metrics can give investors a sign as to a company’s long-term health beyond earnings. For instance, the restaurant industry may look at the turnover, or the number of times that customers sit down at tables during the course of a day. Many retailers use similar metrics. The simplest metric for retailers and fast food restaurants is same-store sales. That gives a sign as to whether a company is performing well, ...

One way investors can find good opportunities is to find stocks that institutional investors are buying. Institutions have to declare their stock purchases over time, from insurance companies to hedge funds, and any organization that becomes a major shareholder. When these big players buy in, it’s a sign that they expect shares to trend higher over time. It may not happen right away, but these large buys are usually a sign of a stock with significant upside. One recent institutional buy is Uber (UBER). Pershing Square, the fund managed by Bill Ackman, is built a large stake in the ri...

Companies have many ways to see faster growth. One way is to invest more into researching new products and services to offer. For some companies that have multiple departments and divisions already, a corporate spinoff may be ideal. That could include the direct sale of a division to another company. It could also mean that a company voluntarily splits itself up into two or more companies. That way, investors can view a company as a standalone business, not as just one part of a more unwieldy whole. General Electric made such a split in the past few years, splitting into three compan...

This earnings season, many companies with large exposure to cloud storage have reported weaker revenues. That’s been a big driver for a selloff, even if overall earnings have generally been bullish. That’s creating a short-term opportunity to buy a drop in these companies. After all, data needs only continue to rise. And companies that provide cloud services have more jumps in demand coming as AI programs continue to roll out. For instance, Google (GOOG) saw its largest one-day market cap decline ever following its latest earnings. Overall numbers were good, but revenues were a littl...

Over time, a stock will continue to rise thanks to growing earnings. That tends to be the stickiest metric for investors when it comes to rewarding a stock. However, over the course of a quarter, other factors may be at play. Consequently, that can mean that a company is capable of growing its earnings, but can also be susceptible to market fears along the way over other concerns. For instance, digital payments company PayPal (PYPL) just beat on earnings and revenues. But markets didn’t like that the company’s overall margins contracted compared to prior quarters. That’s a solvabl...

Earnings season is underway. And investors are finding reasons to be both bullish and bearish right now. For companies that are beating earnings handily, the market is generally rewarding those companies, especially if they also show the ability to raise their guidance. That includes tech and non-tech stocks alike. With some of the rising uncertainty the market, including uncertainty over AI investments and trades, investors may find better returns with more defensive companies beating earnings now. One such play is food giant Tyson (TSN). The company just reported fantastic results ...

As a company grows, it often requires investor capital to succeed. That can mean issuing shares over time. As a company matures, its cash flows rise, and they can start rewarding investors with buybacks and dividends. Dividends aren’t as tax efficient, but investors tend to flock to cash flows. If a company’s dividend comes under threat, however, a big selloff may be in the works. Shares of United Parcel Service (UPS) sank to a multi-year low, following earnings and a report that Amazon (AMZN) will be cutting its shipping volume. The company reports that its dividend, which has no...