How one phrase from earnings season is reshaping our view on the market — and why the AI story is just getting started.
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Raised Forward Guidance: The Phrase Moving Stocks
If there were ever three words to summarize this market, they’re simple — raised forward guidance.
Over the past two weeks, we’ve seen a wave of companies not only beating on earnings and revenue but raising their outlooks for the quarters ahead. That phrase alone has been a spark — igniting double-digit gains across multiple names in our AI² and Momentum portfolios.
Just last week:
- Coherent (COHR) surged 16% after earnings.
- Lumentum (LITE) jumped 22% before we closed it today.
- Red Violet (RDVT) popped 9%.
- JFrog (FROG) ran 27%.
- And Lemonade (LMND) stole the show — up 34% in one day.
The lesson? Momentum follows fundamentals. We don’t chase spikes — we wait for new bases and support levels to form before adding to strong names. These are companies proving themselves through execution, not hype.
Why We’re Still Bullish on AI (and Why Wall Street Isn’t)
Despite the media’s drumbeat about “AI bubbles” and “overvaluation,” the real story is much simpler: we’re still early.
Every major CEO in the AI ecosystem — from software to semiconductors — is saying the same thing: “We’re just getting started.”
The frustration? Negativity sells. But what the headlines miss is that these companies are building real, revenue-generating infrastructure. The capital investments by Nvidia, Microsoft, Amazon, and Micron aren’t short-term experiments — they’re decade-long commitments.
And unlike the dot-com bubble, these companies are cash-funded and profitable.
When Fear Meets Fundamentals
Last week’s volatility was fueled less by earnings and more by missing data.
With the government shutdown halting labor reports, Wall Street was left flying blind — relying on patchy private data instead of the usual Bureau of Labor Statistics releases.
When the ADP jobs report came in positive but Challenger job cuts spiked, traders panicked. But context matters. Those reports are noisy, and once real data resumes, the market will likely settle back to trading on fundamentals.
Our stance: the economy is still healthy, recession risk is low, and the technical picture remains constructive.
Patience Over Panic
When markets get choppy, the best move is often to pause — not panic.
Friday’s reversal offered a perfect example: hammer candles across multiple insider positions, holding right at key moving averages.
We closed the week down modestly, but the setups told a clearer story: the bulls aren’t gone, just catching their breath.
The AI² Evolution Continues
The foundation for our AI² Index is expanding — from performance dashboards to forward earnings analysis. We’re integrating new tools that project multi-year EPS and PE trends to better identify long-term winners.
By tracking forward guidance, capital spending, and earnings momentum, we’re able to spot which companies are truly building sustainable AI growth stories — and which are just riding headlines.
The Bottom Line
AI isn’t a bubble. It’s a business transformation — still in the early innings.
Those who can separate signal from noise will find that the “raised forward guidance” stocks of 2025 are setting up the next leg of the wealth wave heading into 2026.
We’re staying focused, patient, and data-driven — because fundamentals always win out over fear.
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