Tom Yeung here with your Sunday Digest. 

In the early days of the Covid-era “everything bubble,” I wrote a recommendation I would rather forget: Nio Stock Isn’t the ‘Tesla of China’ After All. 

In it, I outlined why the Chinese electric vehicle (EV) startup faced “far stiffer competition than Tesla ever did,” and how it did not have the momentum to compete with the country’s 800-pound gorilla, BYD Co. Ltd. (BYDDF). The next trillion-dollar car company, this was not. 

The assessment proved correct… eventually. The EV startup has since lost 82% of its market value and remains a relatively small player in a crowded, cut-throat market. Analysts are forecasting steep losses until at least 2028 as dozens of rivals jockey for market share.  

Still, I would rather forget that recommendation because the timing was so awful. Here’s what happened in the months after that call… 

Five months too early 

So, I was forced to reconsider my strategy. How should a long-term investor think about short-term market moves? After all, even investors with multi-year time horizons still exist in a world divided by days and months. 

The answer came at first with quantitative methods, and then with artificial intelligence. These increasingly complex systems were designed to sniff out moves in the market and predict the most likely moments for breakouts to happen. 

These systems have only gotten better with time. One of my five Moonshot Stocks for 2025 has already returned 95% (and none has lost more than 25%). And several recent picks are already up double digits despite earnings season still being a month away. 

And now, we’re making our corporate partner TradeSmith’s most powerful AI system available to you. 

Over the past several weeks, you’ve heard me talk about TradeSmithGPT, a powerful AI system that identifies the exact “profit window” for a trade. It’s so good that even Louis Navellier admits that it beats 99% of investors. In fact, many of these AI-chosen companies I’ve talked about are already off to strong starts. e.l.f. Beauty Inc. (ELF) has gained 5% in less than a week while Robinhood Markets Inc. (HOOD) has gained 6%. 

What makes this system even better is that it can help recommend options to profit from these trades. Investors who bought July 18 call options on HOOD with $80 strike prices, for instance, would have seen their 6% profit turn into a 102% gain. 

During a special event on Wednesday, TradeSmith CEO Keith Kaplan outlined exactly what TradeSmithGPT is and how it can help the everyday investor make huge gains in a matter of weeks instead of years. Keith believes this is the number-one strategy investors need to use if they want profit in this chaotic market. (If you missed the event, you can watch the replay here.)   

So, in today’s Digest, I’d like to share three companies TradeSmithGPT is recommending.  

The Beauty Queen 

Shares of Estee Lauder Companies Inc. (EL) have recovered sharply since Amercian-Chinese relations began thawing in May. The cosmetics firm generates a third of revenues from the Asia-Pacific region, and China makes up a significant portion of its highest-margin business. 

TradeSmithGPT recommends investors buy calls on this promising rebound. The company entered its quantitative “green zone” last week, a historic sign that shares are ready to break back upwards, and call options are a leveraged way to gain even more exposure. 

Estee Launder enters the green zone  

The fundamentals back this up. Estee has spent decades earning a preferred vendor status among brick-and-mortar retailers. It’s also invested heavily in a large portfolio of brands that include La Mer, Clinique, Origins, M.A.C., Aveda, and more. That’s turned EL into the largest firm in the “prestige skin care” market as well as in premium makeup. Profit margins are expected to rebound from 3% this year to a more historically average level of 7% by 2027 as Asia-Pacific demand picks back up. Shares are roughly 30% undervalued given current estimates. 

That makes TradeSmithGPT’s predictions so compelling. The system believes shares should rise to $85 in the next 30 days, giving certain call options as much as a 110% upside. Not bad for a typically conservative stock! 

An AI Superstar 

Micron Technology Inc. (MU) reported a stunning set of earnings on July 25. Revenues rose 36% to $9.3 billion, beating Wall Street forecasts by 5%, while earnings per share tripled to $1.91, blowing expectations out of the water. Analysts have scrambled to raise their earnings estimates as a result. 

Results like these should ordinarily trigger a multi-digit increase in share prices. Earnings, after all, is what makes a stock valuable; more of it should mean higher prices. 

Yet, Micron’s shares fell 6% in the days following this announcement. 

However, TradeSmithGPT believes that’s a gross miscalculation on Wall Street’s part. The system projects a 12% upside, and suggests investors sell puts to earn some premium while shares catch up.  

Once again, the fundamentals support this view. Micron’s fiscal third-quarter earnings were powered by insatiable demand for artificial intelligence chips. Sales of its High Bandwidth Memory (HBM) surged 50% sequentially for the second-straight quarter, and analysts believe that AI-focused segment now makes up 20% of total sales. Micron appears on track to achieve its goal of 20% market share in HBM by next quarter. 

The business outlook additionally support another two to three years of a cyclical upswing. Nvidia Corp. (NVDA) only released its most recent Blackwell chips in the fourth quarter of 2024, and manufacturing bottlenecks means we should see continuous, growing demand going through at least 2026. It’s also worthwhile to note that DRAM memory is seeing an upswing in demand, offsetting a 20% volume decline in the NAND market. Micron is the third-largest player in DRAM and fifth-largest in NAND. 

The cycle will eventually turn back negative, as it has in the past. But the puts would have expired long before that point. 

Gene Editing Buyouts 

Finally, shares of gene-editing companies rose this week after Mounjaro developer Eli Lilly & Co. (LLY) acquired Verve Therapeutics for $1.3 billion. Suddenly, every gene editing firm has become a buyout target. 

There’s a good reason for Lilly’s acquisition. Over the past several months, the head of the Department of Health and Human Services, Robert Kennedy Jr., has moved to de-emphasize vaccines. On June 9, he dismissed the entire 17-member Advisory Committee on Immunization Practices and replaced them with several vaccine skeptics. The committee has already made its mark by advising on Thursday that multi-dose flu vaccines should not be used. 

Drugmakers have rightly become concerned. Many have invested heavily in immuno-oncology (i.e., cancer vaccines), and recent appointments within the HHS suggests that approvals for these therapies will be far harder to gain than expected. Drugs that are approved may face issues with reimbursements.  

Gene editing offers a potential way out. Not only has RFK Jr. previously voiced support for “regulatory flexibility” with the technology, but he’s also invested in at least one firm. 

That’s why Crispr Therapeutics AG (CRSP) is such an interesting play. 

Crispr is one of the earliest movers in Crispr/Cas9-based therapeutics. It has six separate drugs in clinical trials, and another four in preclinical trials. Several have shown promising Phase 1 data. 

The company is also seeing a strong rollout of CASGEVY, its one-time therapy to treat sickle cell disease. Its distributor, Vertex Pharmaceutical, recently raised its guidance thanks to better-than-expected uptake in the drug. 

That bodes well for shares, which TradeSmithGPT sees as undervalued. The AI system estimates that the stock could rise 7% to $50.81 within 30 days, giving some call options triple-digit upside. 

Though early-stage biotechs will always have a large element of risk, TradeSmithGPT thinks this bet is one worth taking. 

Picking the Right Options 

Options have long scared many investors. Not only do people need to get the direction of the stock correct (an already difficult task). They also need to know how much the stocks will rise or fall. 

In other words, if a trader buys options on a $100 stock thinking it would rise to $150, he could still lose money if the stock “only” rises to $140. 

Yet, the payoffs can be vast. Options can turn small gains into large ones – such as a 6% profit in Robinhood into a 102% gain – or large ones into generational wealth. Certain call options on Nvidia that expired last week did so after gaining 30X in less than a week. 

That’s why I strongly encourage you to watch Keith’s presentation on TradeSmithGPT. In it, he will explain how the system chooses its most promising stocks to buy, and how it then decides which options have the best chances of generating payoffs. 

But don’t wait long. During the event, Keith detailed three brand-new opportunities identified by TradeSmithGPT that investors need to act on before next Tuesday, July 1. This will also be your very last chance to watch the replay. Click here so you don’t miss it. You won’t want to miss what Keith has to say.

Until next week, 

Tom Yeung 

Market Analyst, InvestorPlace