CEO Watchlist: Week In Review

April 27, 2025

TOP NEWS AFFECTING THE STOCK MARKET THIS WEEK:

The Next Bull Market Just Began? This Indicator Says "YES", With 100% Accuracy! (Source)

Stocks mentioned: $VOO, $LRCX, $AMAT, $KLAC

The S&P 500 (VOO) extended its rally and triggered the rare Zweig Breadth Thrust (ZBT) Indicator, a historically bullish signal suggesting stocks often rise over the next 6–12 months with 100% accuracy, which can be seen in the data table below from Carson Research. Analysts like Mark Newton and Dean Christians view it as a positive intermediate-term sign, but caution that the market still faces risks, especially from unresolved tariff issues and weak economic data. Some experts, including Tom McClellan, warn that this rally could be just a bear market bounce, with the broader downtrend still intact.
We at CEO Watchlist rely heavily on data for our analysis. It's rare to find data as strong as this. When we say "strong data", we are looking for data that spans a long time period, because the longer the timeframe you analyze, the more data points you are collecting, which tends to make the data more accurate and consistent. For example, if you wanted to know the weather in a certain city, is it more accurate to look at the weather one day out of the entire year? Or look at the weather for all 12 months of the year? You will probably get a more accurate understanding of the average weather by looking at the 12 months rather than the 1 day. This is because you are using more data points (stronger data) thanks to the longer timeframe. This type of data analysis works with anything, including the stock market. Now, the second thing that makes this "strong data" is the fact that it has a 100% success rate. If you look on the data chart below, you will see a row called "% higher". You'll also notice the columns, which represent the number of months after the ZBT indicator was triggered. You will see that at 1 month after, stocks are positive 94.7% of the time, which is huge! The only thing better than that is the fact that 6 months and 12 months after, stocks have historically been up 100% of the time, as seen in the chart below. If stocks are not up 6 months or 12 months from now, it would be the first time in history since World War 2. This is why we really respect this indicator and believe there is a high likelihood for it to hold true again this time, but we are concerned about a potential black swan event or worsening relations with China over tariffs.

For these reasons, we like U.S. stocks for the long-term, but in the short-term (weeks to months), we believe there can still be a lot of volatility until there is more clarity on tariffs. If China and the U.S. solve their trade war, we think these 3 stocks will be clear winners: Lam Research (LRCX), Applied Materials (AMAT), and KLA Corp (KLAC). These are 3 semiconductor companies that have high exposure to China and have sold off dramatically because of that. They are all very strong growth companies with good financials, so we believe any positive news on the tariff front is positive news for these stocks.

AI’s Growth Creates A Problem Nobody Saw Coming... (Source)

Stocks mentioned: $AMZN, $NVDA, $XOM, $VST, $GEV, $XLE

As artificial intelligence continues to expand, technology giants like Amazon (AMZN) and Nvidia (NVDA) are quietly admitting that powering this growth could come at a steep cost, which benefits 3 stocks in particular:

1. ExxonMobil (XOM)
2. Vistra Corp. (VST)
3. GE Vernova (GEV)

At a recent energy summit, executives from Amazon and Nvidia stated that, "all options are on the table" to meet AI’s surging energy demands, including turning to fossil fuels like natural gas. While they reaffirmed their long-term commitments to clean energy, they made it clear that the overwhelming short-term need for power could force a reliance on traditional energy sources, revealing a growing tension between AI innovation and environmental sustainability.

Additionally, this shift in energy strategy could have ripple effects across the stock market. As we mentioned earlier, stocks such as an ExxonMobil (XOM), will be a beneficiary of this growing need for energy. It is one of the largest players in the natural gas and oil sectors, which could make its stock price boom as demand for fossil fuel skyrockets. The broader energy sector, tracked by ETFs like the Energy Select Sector SPDR Fund (XLE), could also see increased interest from investors looking to capitalize on AI’s massive power needs, while staying diversified across multiple names, including ExxonMobile (XOM). Outside of traditional fossil fuel energy, politicians such as Nancy Pelosi believes we may need alternative energy through nuclear. The reason I say this is because she recently made a large purchase in Vistra Corp. (VST) which is a major nuclear company. This is a stock I personally invest in and keep on my watchlist, so it seems that Nancy and I are on the same page. An alternative to Vistra Corp. (VST) is GE Vernova (GEV), which just reported a very strong quarter. I don't think we could go wrong with either VST or GEV for the long term as they both are very strong companies.

Are We On The Verge Of World War 3?! (Source)

Stocks mentioned: $NOC, $GD, $PLTR, $CRWD

China and the US are still going at it when it comes to the trade war and tariffs this past week. Trump continues to claim that the White House is having talks with China, while China continues to deny it. Unfortunately, there has not been a lot of clarity around this matter, which has led the public to guess what the truth is. What we do know is the United States' ally, India, was the victim of a terrorist attack claimed by a group in Pakistan, which who would have guessed... is China's ally. So while tension continues to be high between the U.S. and China, allies of each respective country are on the verge of going to war over this attack. India and Pakistan are both nuclear armed countries, which is not an ideal scenario with all the geopolitical tension in the world right now. We are following this story very closely, in addition to the onoging war in Russia and Ukraine. This past week, President Trump and Ukrainian President Zelenskyy met face-to-face for the first time since their Oval Office clash, just moments before attending Pope Francis’ funeral. Although Trump claims Russia and Ukraine are “very close to a deal,” uncertainty around Crimea’s status and the potential for expanded sanctions could inject fresh volatility into defense stocks and broader markets as investors weigh the risks of prolonged conflict.

Given the sensitive nature of these developments, we are currently keeping a close watch on the outcome of all these conflicts. This is important as they could have a major snowball effect across the market, which would benefit defense stocks. One company we are monitoring closely is Northrop Grumman (NOC), which specializes in aerospace and military technology and could see increased demand if global instability leads to higher defense budgets. Another key name is General Dynamics (GD), known for producing tanks, submarines, and other military vehicles that would likely be in greater demand if tensions escalate. NOC and GD are two very strong, mature companies in the defense sector, but as a growth investor, we like to look for names that can outperform over the next decade, even if they may be considered higher risk. Two names we currently like a lot moving forward are Palantir (PLTR) and Crowdstrike (CRWD). Palantir builds advanced software platforms that help the military gather, analyze, and act on massive amounts of battlefield and intelligence data to make faster, better decisions, while CrowdStrike helps protect the U.S. military’s computer systems from hackers by using powerful cybersecurity software that watches for threats and blocks attacks around the clock. Neither of these names are cheap on any valuation metric, but we believe that is because they are the best in their respective industries and have the most room for potential upside.

INSIDER TRADES FROM THE WEEK:

1. Goldman Sachs (GS) - John Hess, Director, bought ~$1.9 million of Goldman Sachs stock on April 15, 2025, but it was reported to the public on April 17, 2025. (Source)

2. Lindblad Expeditions (LINE) - Alex Schultz, a Director, bought ~$445,000 of Lindblad Expeditions stock between April 21-22, 2025, and it was reported to the public on April 22, 2025. (Source)

3. Texas Capital Bancshares (TCBI) - Robert Stallings, a Director and 10% owner of the company, bought ~$525,000 worth of Texas Capital Bancshares stock in April of 2025, but it was most recently reported to the public on April 23, 2025. (Source)

Note: If you use the source link above, you can see Robert Stallings has a long history of buying TCBI stock. We are only reporting on the April 2025 activity.