When investors talk about the stock market, they’re usually referencing an index such as the S&P 500. Every index is made up of a mix of different stocks, and carry different weightings. Over time, markets tend to rise because weaker companies in the index are replaced with stronger companies. Such rebalancings occur periodically, and investors who buy shares of companies going into a bigger index can often get in ahead of billions of dollars flowing into a stock. The Nasdaq 100 just announced three additions. Two are fast-moving tech plays, leavingAxon Enterprise (AXON) a surpri...

While investors have started looking beyond the chipmakers to play the AI boom, it’s clear that chips are still central to that theme. The world’s greatest AI software can’t run if there isn’t the infrastructure for it, including energy and data centers to the hardware, including processing chips. It’s likely that many chipmakers will continue to benefit in 2025, and for now, the market will continue to reward the top industry players. For instance, chipmakerBroadcom (AVGO) soared nearly 25% last week and its market cap topped $1 trillion. The company’s CEO painted a massively bullis...

Every company will run into trouble at some point. For investors, it’s critical to know when the biggest dangers have passed. One sign is that even when facing bad news, the share price either doesn’t respond to it, or the stock goes up. That could be a sign that the turnaround is underway. And that things are starting to finally look up. Buyers who wait for this early signal can often see great returns from a new trend higher. For instance, airline manufacturerBoeing (BA) has been rocked with several scandals in recent years, and its shares have definitely paid the price. However, t...

Investors can sometimes see big returns from companies that restructure. That’s been the case withApple (AAPL), which nearly went bankrupt in the late 1990s before it was able to refocus on key products. Apple would go on to create the iPod and iPhone after its bailout. While not every restructuring will turn a company into the world’s largest, a successful turnaround should mean big profits as the market starts rewarding shareholders. That could be the case with video game retailerGameStop (GME). The company’s latest earnings report wasn’t impressive, with a 20% decline in sales. Bu...

Some companies are cyclical, having a few good years and then a few bad years. Companies such as automakers or durable goods like appliances tend to fare well when the economy is, for instance. Other companies can play to longer-term trends. That’s particularly the case for tech companies, and why they’re such valuable firms to begin with today. The rise of AI also means an increase in their growth potential in the years ahead. That means investors should continue to buy shares of AI-related companies when they dip. That’s particularly the case for big players that may hit a few spee...

There are many ways to profit from the stock market. One such way is to target companies that trade at a reasonable value, have a strong brand, but could benefit from stronger leadership. These companies tend to be targets for activist investors. Today’s activist investors tend to be firms looking to realize bigger profits from reorganizing a company, selling off a corporate division, or scaling back costs. If they’re successful, they can make market-beating returns in a short period of time. A handful of companies have been repeated targets of takeover offers, including department s...

The energy sector has been a laggard for 2024. Oil prices have struggled to trend around $70 for most of the year. The outlook isn’t too strong going forward either, amid fears of a slowing economy, or at least one where energy demands are focused more on nuclear energy for AI projects. While oil may be down, it’s not out. It’s still a critical resource that’s needed, and the most energy dense for transportation needs. Given the slowdown in EV adoption, it’s likely oil still has room to shine. That’s why long-term investors may want to consider accumulating industry leaders in oil no...

The AI story continues. While many big-cap names are at all-time highs, other and smaller players are starting to show better signs of strength. Investors can likely see better returns going into 2025 with smaller-cap AI stocks. That’s especially true with software stocks. That’s because software companies tend to offer high profit margins. Once a piece of software is developed, the marginal cost of developing an additional copy is essentially zero. Software companies seeing strong demand from AI software can continue to be winners from here. One such play isVerint Systems (VRNT), wh...

While chip stocks have slowed down in recent months, companies continue to invest billions in AI initiatives. That’s seen with a demand in new power sources, plans to build out data centers, and other hardware necessary to operate today’s AI programs. With focus moving away from the chipmakers, companies that offer other parts of the hardware ecosystem can still see growth in the years ahead. Particularly if they’re making breakthroughs that can further benefit the AI rollout. One such computer hardware play is in data storage. AI will create significantly more data than we use today...

Investors often have a choice that breaks down between growth stocks and value plays. Right now, the soaring demand for AI technology is giving many slow-growth companies some unexpected kickers. That includes utilities, but can also include companies related to hardware, software, and connectivity. Investors can likely see above-average returns playing to this trend in the years ahead. And more old-school companies may offer consistent returns rather than the big jumps and drops of a growth play. For instance, telecom giantAT&T (T) is looking to grow itself as the leading wirele...