Market Overview
The Fed reduce charges, and shares, which had been already in an uptrend as extensively famous right here, accelerated to new all-time highs. We proceed to see expertise resulting in the upside, which confirms the risk-on setting. The Nasdaq led the rally larger final week, closing up 2.21%. The S&P 500 adopted, closing up 1.22%, whereas the Dow Jones Industrial Common rallied 1.05%. There are nonetheless sturdy alternatives coming from China, which is ready to profit from greenback weak point and decrease charges.
Shares I Like
Domo DOMO – 50% Return Potential
What’s Taking place
- Domo, Inc. (DOMO) is a number one cloud-based software program firm offering enterprise intelligence and information visualization options, enabling organizations to handle and analyze information successfully, providing buyers publicity to the quickly rising enterprise analytics and digital transformation sector with a give attention to data-driven decision-making.
- The corporate’s most up-to-date quarterly report confirmed income of $79.72 million and earnings solely of $879 thousand.
- This valuation on DOMO is blended. Worth-to-Gross sales is fairly excessive at 2.16 however E-book Worth is unfavourable at -4.64.
- At a technical degree, DOMO is looking for to breakout from an ascending triangle sample, which factors to a continuation of the development.
Why It is Taking place
- Domo’s strategic partnerships with main cloud suppliers like Snowflake and AWS have been expanded lately, amplifying the platform’s information integration capabilities. These alliances considerably improve Domo’s product ecosystem and create aggressive moats, enabling it to seize a bigger share of the rising enterprise information analytics market.
- The corporate was lately ranked #1 vendor in Dresner Advisory Providers’ 2025 Knowledge of Crowds Agentic AI Report, validating its management within the high-growth AI and analytics market. This recognition can increase model fame and entice new enterprise purchasers prioritizing AI-powered insights, which bodes properly for long-term top-line progress and investor sentiment.
- Analysts stay optimistic with 4 purchase scores and no promote scores, underpinned by a worth goal vary averaging $18.50, implying an upside of roughly 18.7% from present ranges. Analyst optimism lends extra credibility to Domo’s progress story and might drive elevated institutional curiosity, each of which help a constructive inventory outlook.
- Regardless of a traditionally excessive ahead P/E ratio reflecting near-term profitability challenges, the corporate’s ongoing shift to constructive earnings, bettering margins, and strong money flows sign an inflection level. Traders who purchase in now stand to profit from each elementary enhancements and a number of growth.
- The corporate’s Subscription Remaining Efficiency Obligations (RPO) climbed to $409.8 million as of July 31, 2025, reflecting a 19% year-over-year improve. This metric represents contracted future income and is a robust indicator of sustained buyer dedication and income visibility past simply the present quarter.
- Domo reported a robust second quarter of fiscal 2026 with whole income reaching $79.7 million, barely outpacing its prior quarter and exhibiting resilience amid market uncertainty.
- Analyst Scores:
- JMP Securities: Market Outperform
- Cantor Fitzgerald: Chubby
My Motion Plan (50% Return Potential)
- I’m bullish on DOMO above $14.25-$14.00. My upside goal is $27.00-$28.00.
elf Magnificence ELF – 50% Return Potential
What’s Taking place
- e.l.f. Magnificence, Inc. (ELF) is a number one cosmetics firm providing inexpensive, trend-driven make-up and skincare merchandise, offering buyers publicity to the quickly rising magnificence and private care sector with a give attention to accessible, high-quality, and socially engaged branding.
- Within the final quarterly report, ELF confirmed income of $353.74 million and earnings of $51.33 million.
- Valuation may be very excessive. P/E is at 85.42, Worth-to-Gross sales is at 6.24, and EV to EBITDA is at 39.09.
- From a technical perspective, ELF is breaking out from an enormous cup and deal with formation. I am searching for bullish momentum to speed up tremendously within the coming weeks.
Why It is Taking place
- The acquisition of Rhode for $800 million marks a strategic growth into the fast-growing skincare phase with a premium model based by Hailey Bieber. This acquisition diversifies e.l.f.’s portfolio, enhances its worldwide progress prospects, and presents potential cross-selling synergies, all prone to drive long-term shareholder worth and prudent inventory re-rating.
- e.l.f. Magnificence is actively diversifying its provide chain, lowering China dependence from almost 100% to about 75%. This technique mitigates dangers associated to tariffs and geopolitical tensions, guaranteeing extra secure margins and provide continuity. Such operational resilience will probably be seen favorably by buyers cautious of world commerce disruptions.
- e.l.f. Magnificence is pioneering AI initiatives throughout social media advertising and marketing, IT help, and operations, positioning itself on the forefront of tech adoption in cosmetics retail. These AI improvements can drive value financial savings, enhanced shopper concentrating on, and personalised experiences, which might speed up income progress and margin growth.
- Regardless of a small income miss relative to forecasts, adjusted EBITDA elevated 12% to $87 million, highlighting sturdy working leverage and environment friendly expense administration. This margin growth in a difficult setting alerts administration’s disciplined method, reassuring buyers that profitability can enhance even with out booming top-line progress.
- The corporate’s Q1 internet gross sales grew by 9% year-over-year to $354 million, pushed primarily by a strong 30% improve in worldwide gross sales and a 5% rise in U.S. gross sales.
- e.l.f. Magnificence delivered a robust fiscal Q1 2026 earnings beat with an EPS of $0.89, exceeding consensus estimates of $0.84 by about 6%.
- Analyst Scores:
- Raymond James: Sturdy Purchase
- Morgan Stanley: Chubby
My Motion Plan (50% Return Potential)
- I’m bullish on ELF above $120.00-$122.00. My upside goal is $210.00-$220.00.
Rigetti Computing RGTI – 14% Return Potential
What’s Taking place
- Rigetti Computing, Inc. (RGTI) is a pioneering quantum computing firm creating superior quantum processors and software program, providing buyers publicity to the quickly rising quantum expertise sector with a give attention to scalable, high-performance computing options.
- The corporate’s latest quarterly report confirmed income at $1.8 million and a lack of $16.84 million.
- Valuation in RGTI is up within the clouds. Worth-to-Gross sales is at 604.95, and the E-book Worth is simply 1.71.
- From a charting viewpoint, RGTI broke out from a completely huge cup and deal with formation. The quantum story is not completed, of us.
Why It is Taking place
- Rigetti secured a major $5.8 million, three-year contract from the U.S. Air Pressure Analysis Laboratory centered on advancing superconducting quantum networking expertise. This partnership not solely offers regular authorities funding but additionally establishes Rigetti as a trusted accomplice in crucial nationwide safety expertise, doubtless growing credibility and opening doorways for future contracts that would drive long-term income progress.
- Rigetti’s revolutionary quantum processor, the Cepheus-1-36Q, options 36 qubits utilizing a multi-chiplet structure with 99.5% median two-qubit gate constancy. This cutting-edge expertise represents a leap ahead in qubit efficiency and scalability, positioning Rigetti as a frontrunner in superconducting quantum computing.
- Rigetti’s modular chiplet method to quantum computing structure, which interconnects a number of smaller chips fairly than counting on single giant chips, addresses key scalability challenges within the quantum business. This architectural innovation is more and more acknowledged as a extra viable path to large-scale quantum computer systems, enhancing Rigetti’s aggressive positioning towards rivals who face limitations with single-chip expansions.
- The corporate strengthened its monetary place dramatically in 2025, finishing gross sales of $350 million in gross proceeds from frequent inventory choices and boosting its money and money equivalents to $571.6 million with no debt.
- Regardless of income challenges with Q2 2025 income of $1.8 million declining 42% year-over-year as a result of expiration of the Nationwide Quantum Initiative, Rigetti’s sequential quarterly income progress (+20%) signifies ear
- Analyst Scores:
My Motion Plan (14% Return Potential)
- I’m bullish on RGTI above $22.00-$23.00. My upside goal is $32.00-$33.00.
Market-Transferring Catalysts for the Week Forward
A Falling Price Surroundings is Right here – What’s Subsequent?
Right here we have now it – the Fed reduce rates of interest 25-basis factors. Lengthy-term bond yields are dropping sooner than short-term yields, as I am going to clarify afterward on this report. However we’re seeing indicators of a refinance increase that would increase the financial system and carry shares to new highs.
However as I have been warning, the Fed is enjoying with inflationary fireplace. Sooner or later, it can make it is dreaded return, and that is when the Fed and even the Division of Treasury goes to be put in a pinch.
I am not ruling out yield curve management (YCC) coming to america in a few years. There actually will not be one other alternative, and if there’s any hope of managing (not sustaining) the federal debt, it is the one tangible resolution.
Sentiment Follows Worth, Not the Different Approach Round
The market’s latest worth motion is a superb reminder of how corrections can happen by way of time as a substitute of worth. And through this “time,” all types of causes to be bearish will come to the floor.
Now that we have damaged out to new all-time highs, and the market has come to time period with rates of interest falling, we’re beginning to see bullish sentiment rise to its highest degree in months. If something, this warns to not chase this rally.
Does this imply we’re routinely going decrease? Quite the opposite. However we have to assume when it comes to risk-reward. No one is aware of what the market goes to do, and anybody that pretends like they do is somebody you need to keep away from. The development is up, however near-term, the gang has realized they had been incorrect and are actually panic shopping for into new all-time highs.
Sector & Trade Energy
The tape would not lie. We noticed new all-time highs final week throughout the board after the Fed reduce charges, and as soon as once more, the standout sector was expertise (XLK). It is no shock to see shares so sturdy with all the proper growth-oriented sectors outperforming.
In the meantime, all the defensive sectors proceed to do poorly. Once we’re seeing healthcare (XLV), shopper staples (XLP), vitality (XLE), and utilities (XLU) all within the backside half of the sector rankings, you realize that the market is pricing in additional progress.
Now we should be fascinated with which sectors are prone to do properly beneath a falling price setting. It is going to hold serving to tech, however we also needs to watching shopper discretionary (XLY) and actual property (XLRE) as properly.
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Editor’s Word: It is Tech’s Market – We’re Simply Buying and selling It.
The place’s the “New Cash” Going? (Sector ETF: DBC/SPY)
We’re in a falling rate of interest setting now. The Federal Reserve is slicing, which signifies that cash is being printed. This “new cash” goes to should discover a dwelling someplace, and odds favor it going into shares.
However it’s not simply going to enter shares. With the Fed enjoying with inflationary fireplace, we have now to take a look at the commodity sector, as a result of that’s what drives inflationary pressures essentially the most. For this reason I am wanting on the ratio between commodities (DBC) and the S&P 500 (SPY) this week.
It has been a reasonably clear downtrend for the previous couple of years. In different phrases, commodities have underperformed as inflation has cooled. However we have to keep watch over this ratio, particularly if it clears the higher trendline of the channel. As a result of if it does, we might begin to see inflation change into a really actual danger in 2026.
Are You Ready for an Period of Chinese language Tech Dominance? (Sector ETF: CQQQ/QQQ)
I can not stress sufficient the significance of this ratio. Individuals have been in love with the Nasdaq 100 (QQQ) right here in america for years. However let’s always remember that this can be a world market, and the perfect alternatives will not all the time be stateside.
The emergence of the Chinese language tech sector (CQQQ) as a critical contender within the AI arms race can’t be understated. And if we have a look at this ratio between CQQQ and QQQ, we might be smart to not ignore the sector in any respect.
The rounding backside sample on this chart means enterprise. If it breaks above resistance, I might be rather more centered on what is going on on within the Chinese language tech sector than within the U.S. tech sector. Many will probably be reluctant to pursue it, which is able to make it all of the stronger of a development.
What Price Cuts Imply for Bonds (Sector ETF: BIL/TLT)
It is beginning to occur. We’re seeing long-term bonds accelerating of their latest outperformance towards short-term bonds, which is just going to pressure the Fed to proceed slicing till inflation turns into an issue.
I am wanting on the ratio right here between short-term Treasury Payments (BIL) and long-term Treasuries (TLT). I need to draw your consideration to the false-breakout from the triangle formation again in Might that additionally ended up being a lower-high.
This signaled that the tide may very well be turning and decrease rates of interest had been coming. If the development is about to show down, it can imply that TLT is shaping up for a superb commerce, not funding, over the following a number of months.
My Take:
I need to be clear and differentiate between a commerce and funding on the TLT aspect of issues. The debt disaster in Washington is critical. We all know this already. However charges are coming down for the following yr or so, and usually, longer length outperforms in such an setting.
However as soon as inflation rears its ugly head once more, TLT, or bonds with longer length, will get hammered essentially the most. I might then count on this ratio to start out climbing again to the upside, however till then, length is the commerce right here.
Cryptocurrency
I need to shift gears a bit this week. For those who’ve been following alongside on the Ethereum setup over the previous couple of months, you are most likely fairly happy with the outcomes. However this week, I need to have a look at one other key DeFi coin – Solana.
The setup in Solana is unimaginable, and I simply do not see lots of people speaking about it. There’s a huge, lovely saucer formation current on the each day chart for Solana. The length of this sample implies {that a} main transfer is underway.
A detailed above 250-260 would characterize a breakout from the formation. This sample is projecting a rally as much as the 480-500 space no less than. For those who’re not getting ready for an altcoin season, try to be. The trail of least resistance is larger in Solana so long as it stays above 215-220.
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