The weekend announcement that certain electronic items from China would be exempt from tariffs helped get the Nasdaq 100 and other technology sectors off to a good start, but the looming dark cloud of earnings season and the economy requires that you stay cautious in picking the stocks that you add to your portfolio.
This week’s Five Stocks looks at several “Best in Breed” names in key industries to help you weather what is likely to be a rough summer.
Broadcom (AVGO) is a global semiconductor and infrastructure software giant, powering everything from data centers to smartphones. With its recent push into AI chips and strategic acquisitions like VMware,
Broadcom continues expanding its footprint across key tech sectors. Shares offer strong cash flow and a solid dividend, appealing to long-term investors.
Broadcom’s 2024 growing footprint in the AI chip industry along with the AI industry’s explosive 35.7% projected CAGR through 2030 puts Broadcom (AVGO) in a prime position to capitalize on this early-stage growth trend.
Shares of Broadcom are one of the few semiconductor companies that have remained in a neutral price trend. The stock’s 50-day moving average remains about its 200-day moving average with both trending in a neutral pattern.
Broadcom’s strong relative strength performance suggests that the stock will take a leadership role in the AI semiconductor recovery expected to begin sometime in the second half of 2025.
Tesla made a strong move last week as the company announced the return of Elon Musk from his post with the D.O.G.E.. Investors had become worried that the visionary CEO had become too removed from the day-to-day operations of the world’s largest EV manufacturer.
Last week’s earnings report was the worst in years as the company’s top and bottom line suffered from a contraction in demand for EV, especially Tesla’s, and signs that the economy is beginning to suffer under the uncertainty of the trade war and slowing economies.
Tesla, however, saw its stock surge by 20% as the NHTSA released a new automated vehicle framework as part of the government’s innovation agenda. The new framwork reduces reporting and investigations into full self-driving vehicles and is the new that Tesla has been waiting for to allow the company’s robotaxi product to move forward.
Tesla shares surged above their 50-day moving average for the first time since January in response and now have an upgraded price target of $350.
Read more details on Tesla’s rally here.
Telefónica S.A. (TEF) is one of the world’s largest telecommunications companies, headquartered in Madrid, Spain. Founded in 1924, Telefónica operates across Europe and Latin America, offering fixed and mobile telephony, broadband, and digital services.
Its major brands include Movistar, O2, and Vivo. The company serves over 300 million customers globally, with significant market presence in Spain, Germany, Brazil, and the U.K. Telefónica has been shifting focus toward digital transformation, 5G deployment, and cybersecurity services to drive future growth.
Weaker dollar usually provides a strong backdrop for stronger international stock growth, which is exactly what is happening with shares of Telefónica S.A..
The stock has seen a steady trend above its 50- and 200-day moving averages that started in January. That trend resulted in the stock forming a Golden Cross in late March. A Golden Cross happens when a stock’s 50-day moving average crosses above its 200-day moving average and forecasts higher prices over the following 3-6 months.
Investors are looking for two things that they can get with the stock, exposure to international strength in a growing market along with a strong dividend yield of 6% (paid semi-annually).
Telefónica S.A. remains in a bullish trend with a target price of $7.50.
CenterPoint Energy (CNP) is a regulated utility company delivering electricity and natural gas to more than 7 million customers across several U.S. states.
The company’s operating footprint includes Texas and Indiana. The company operates with a stable business model focused on infrastructure investment, grid modernization, and clean energy initiatives.
With consistent rate base growth and a strong focus on reliability, CenterPoint offers long-term visibility for income-focused investors. Shares offer a steady dividend and exposure to essential services that tend to hold up well during economic downturns.
The company tends to fair well during the summer months when energy demands – especially in Texas – increase dramatically. That demand provides a seasonality that plays strongly into the bulls hands from May through August for CNP shares.
As a utility stock, CenterPoint has seen increased interest from investors over the last three months as the stock has rallied for more than 10% on increased volume.
Shares remain firmly above their 50- and 200-day moving averages, both locked in strong bullish trends higher.
CenterPoint should be considered a strong growth/income candidate with its 2.4% dividend yield and 33% one-year performance.
The consumer has been putting investors on alert to what is likely to come over the next 6-12 months.
Everything from retail to autos and travel companies are seeing slowing demand as consumers are rapidly pulling back on their spending. The slowdown in spending will be felt in some of the higher prices discretionary experiences like cruises.
The cruise business sloughed through 2023 and 2024 as consumers were still feeling the lasting “get out there” effects of the Pandemic, but that has changed as families are now facing even higher grocery and other staple prices.
Just last week, CNBC reported that more consumers are purchasing groceries using Buy Now Pay Later services. Those services are now seeing a spike in the number of accounts that are going delinquent.
Trade war or not, the uncertainties in the market are slowing booking on Cruise companies like Carnival, a process that will likely play out through all the 2025.
CCL shares are falling into a bear market trend for the first time since 2023 as the stock drops below its 20-month moving average. The stock’s recent test of $15 is a precursor to its 4-6 month move to a target price of $12.50.
