Core Insights - The U.S. equity markets have experienced volatility, with gains in blue-chip tech companies offset by concerns over AI firm valuations, leading to expectations of a market correction [2] - Investors are anxious about the Federal Reserve's potential actions regarding interest rates amid a government shutdown that has created a data vacuum [2] - The upcoming September nonfarm payrolls report is highly anticipated for insights into economic trends and Federal Reserve decisions [3] Momentum Investing Strategy - Momentum investing is characterized by "buying high and selling higher," capitalizing on established trends in stock prices [4] - This strategy has historically generated alpha across various market conditions, though it requires skill to identify trends effectively [5] - A screening strategy has been developed to identify stocks with long-term price momentum and short-term pullbacks [5] Screening Parameters - The screening process selects the top 50 stocks based on the best percentage price change over the past 52 weeks [6] - From these, the 10 worst performers over the last week are chosen to identify those experiencing short-term pullbacks [7] - Stocks with a Zacks Rank 1 (Strong Buy) and a Momentum Style Score of B or better are prioritized for selection [8] Selected Stocks - Seagate Technology Holdings plc (STX) has seen a 169.4% increase over the past year but a recent decline of 11.1%, with a Momentum Score of B [12] - Robinhood Markets, Inc. (HOOD) has surged 231.3% in the past year but dropped 14.6% in the last week, holding a Momentum Score of A [14] - Everus Construction Group, Inc. (ECG) has increased by 46.7% over the past year but declined 13.7% recently, also with a Momentum Score of A [15]

Core Insights - Seagate Technology (STX) stock has decreased by 12.6% over the past 5 trading days, raising concerns about its valuation and potential investment decisions [1][3] - The company plans to lay off 3,000 employees as part of a restructuring plan aimed at saving $110 million annually [3] - STX has shown a tendency to underperform compared to the S&P 500 during economic downturns, indicating potential risks for investors [3][8] Company Performance - Seagate Technology is valued at $48 billion with current revenue of $9.1 billion, trading at $224.35 [7] - The company has experienced a revenue growth of 38.9% over the last 12 months and maintains an operating margin of 21.1% [7] - STX has a Debt to Equity ratio of 0.1 and a Cash to Assets ratio of 0.11, indicating strong liquidity [7] Valuation Metrics - The stock is currently trading at a P/E multiple of 32.8 and a P/EBIT multiple of 26.3, suggesting it may be overvalued [7] - Historically, STX has provided median returns of 65.7% within a year following significant dips since 2010 [7] Historical Performance During Crises - STX stock dropped 58.2% from a peak of $116.02 on January 4, 2022, to $48.49 on November 3, 2022, while the S&P 500 saw a peak-to-trough decline of 25.4% [8] - The stock fully recovered to its pre-crisis peak by May 27, 2025, and reached a maximum of $256.84 on October 1, 2025, currently valued at $224.35 [8] - In previous crises, STX stock has shown significant declines, such as a 35.6% drop during the 2020 Covid pandemic and an 89.1% drop during the 2008 financial crisis, but it has historically recovered to pre-crisis levels [10]

Market Overview - The stock market showed positive performance with significant gains across major indices, defying typical September trends [2][6] - The S&P 500 and Nasdaq experienced upward movements, with tech and financial sectors leading the gains [3][4] - Gold prices reached a record high, increasing by 45% year-to-date, while silver rose by 58%, marking a 14-year high [5][6] Small Cap Stocks - Analysts suggest a shift towards small-cap stocks, anticipating growth as the economy remains strong and interest rates potentially decrease [10][11] - Small-cap stocks have faced challenges in recent years but are expected to benefit from a favorable interest rate environment [10][11] AI and Technology Sector - The AI sector continues to drive market momentum, with significant investments in AI data centers expected to boost demand for storage solutions [25][26] - Companies like Western Digital are positioned to benefit from the growing need for data storage in AI applications, projecting a revenue growth of 15% annually over the next five years [30][31] Earnings Expectations - Upcoming earnings reports are anticipated to show continued strength, with many sectors experiencing positive earnings surprises [13][15] - Companies are expected to report optimistic outlooks despite ongoing trade issues and macroeconomic uncertainties [16][49] Fixed Income Investments - There is a preference for municipal bonds among high-income investors due to their tax-free nature and competitive yields compared to treasuries [20][21] - The yield curve for munis is becoming more attractive, prompting a shift in fixed income allocations towards longer-term municipal bonds [21][22] Company-Specific Insights - Progress Software reported strong demand driven by AI projects, leading to raised guidance for revenue and earnings [39][40] - The company emphasizes its role in supporting AI initiatives through its product portfolio, which includes data management and workflow automation solutions [42][44]

Core Insights - Micron Technology is experiencing growth due to increasing demand for artificial intelligence and strict supply discipline in the memory industry [1][3] - BofA Securities raised the price target for Micron to $180 from $140 while maintaining a Neutral rating, indicating that much of the stock's upside is already reflected in its price [1][2] - The company is benefiting from high bandwidth memory (HBM) sales and a resurgence in traditional server CPU sales driven by agentic AI [3] Financial Performance - Micron's gross margin is projected to be 51.5% in FQ1, which is 600 basis points above consensus estimates, indicating strong pricing power [3] - FY26 and FY27 earnings estimates have been raised significantly by 38% and 56% to $16.28 and $17.55 respectively [3] Market Dynamics - The memory industry is experiencing abnormal supply discipline, which has led to increased pricing in both traditional and new memory markets [3] - The entry of Samsung into the HBM market could potentially impact Micron's market share and pricing in CY26 [3] Competitive Landscape - The strength in AI is seen as beneficial for other companies such as NVIDIA (NVDA) and Broadcom (AVGO), while traditional server CPU strength is positive for AMD [3] - There is potential for increased memory capital expenditures, which could positively affect Applied Materials (AMAT) and Lam Research (LRCX) [3]