Despite how it may seem, modern-day narratives rarely drive market swings. Tariffs, political headlines, niche trends like rare earth materials, or speculation about which company OpenAI partners with next — these stories dominate the news cycle, but they do not reliably move markets, as the consensus believes. If they did, investing would be much easier. The current 2025 stock market rally resembles two major market cycles -- find out what both suggest could be in store for the rest of the year and early 2026.

Less than one-fifth of the U.S. economy is expanding, yet this small segment is growing at such a blistering pace—driven by AI-related spending—that it continues to hold up the rest of the economy. We are living through unprecedented times, with no true historical corollary to today’s economic backdrop. Every cycle feels unique and unparalleled in the moment. What never changes, however, are human emotions and the way the herd responds to periods of greed and exuberance.

Taiwan Semiconductor (NYSE: TSM) recently announced fiscal Q3 earnings, stating its longer-term AI revenue outlook is stronger than anticipated. The company reported record Q3 revenue of $33.1 billion, which was up by a solid 40.8% YoY and 10.1% sequentially. For Taiwan Semiconductor (TSMC), the outlook is two-fold. On one hand, TSMC is deepening its moat with advanced nodes, such as N2 and A16. The company already powers tens of trillions in market cap on the stock market when you consider Apple, Nvidia, Broadcom, Amazon, AMD and Google are customers of TSMC. Essentially, all mega cap stocks have an AI strategy spanning merchant GPUs and custom silicon, and of course, software – yet the common denominator to these strategies is they all funnel into TSMC. Yet, on the other hand, many pundits have been asking – are we in an AI bubble? While AI leaders, related suppliers and strong R&D teams march onward with exceptional earnings reports, ongoing deal announcements and provide strong commentary that AI demand greatly outstrips supply – investors are left wondering what the true value is for the outsized growth.

Micron’s stock is up 120% YTD – or 3X more YTD than AI heavyweight Nvidia. Recently, the high-bandwidth memory content that Micron supplies has increased 3.5X between GPU generations, leading to a quiet memory boom across DRAM and NAND suppliers. Memory is typically a cyclical industry that is low margin and lumpy, yet memory is seeing a newfound resurgence from AI that is strong enough to transform commoditized hardware into a secular trend as the AI economy is built out. AI servers use more DRAM and NAND than traditional servers, relying heavily on high-bandwidth memory (HBM) for training and inference. We look at how Micron has quietly outperformed some of the biggest players in AI YTD and if its ability to defy the odds can continue.

Palantir leads the AI software pack in terms of strong earnings reports this past quarter as the company achieved significant milestones, the most impressive being US commercial revenue grew 93% YoY and 20% sequentially. You will be hard pressed to find this kind of QoQ growth across AI’s biggest players. There are also robust cash flows and expanding margins to strengthen the story. However, what is this Perfect 10 worth? In fact, Palantir is well beyond a Perfect 10 and is rather a Perfect 100 as its forward P/S sits at an astonishing 104. This means taking FY2025 revenue of $4.2B , it would take over 100 years to pay back its current market cap.

CoreWeave saw muted price action following the latest earnings report; yet the soft price action is rare for the AI darling. The company went public in March and has stood out as the premier IPO among AI stocks given the stock is up over 200%. The lockup expired last month, which begs the question – can CoreWeave continue to defy the odds and overcome the typical insider selling that is seen around a lockup expiration? Investors typically fare better waiting for anxious insiders to sell, yet CoreWeave has been anything but ordinary. In terms of timing, CoreWeave has hinted the second half of the year will be stronger. We look at why CoreWeave could end the year on a high note, yet to be prudent, we also look at why there was a negative reaction to the most recent earnings report. We end with a buy plan strategy the I/O Fund is eyeing for weighing the puts and takes on what promises to be a highly volatile, fast moving stock.

The AI frenzy has investors fixated on revenue growth as proof of returns on AI spending that can be as high as $100 billion per year, depending on the company. Yet, Meta is proving that a stronger signal of AI strength may be found further down the income statement — in the bottom line. This quarter, average revenue per person (ARPP) is showing initial signs of bottoming with an important uptick YoY that was absent last quarter when ARPP declined YoY. Secondly, Meta has indicated their internal AI operations will result in lower headcount come 2026 as AI reaches the capabilities of a mid-level software engineer. Combined with a potential inflection point in their ad business, that indicates strong double digit EPS growth will continue in 2026.

In the analysis below, my firm crunched the hard data on Q2 capex numbers and what is coming down the pipe for Q3. If you are an AI investor like we are, this is an analysis you will not want to miss as the numbers below help to dictate how much room is left in many AI stocks. As the final highlight, we are rolling out a brand-new buy plan for Nvidia stock – which is highly dependent on capex growth. When it comes to Nvidia buy plans, many of you are aware the I/O Fund has a strong track record — from our $3.15 entry in 2018, to buying at $10 in October 2022 on the very day the stock bottomed before the AI surge, with real-time trade alerts sent to Members. More recently, we stood apart by urging caution just before the DeepSeek news, outlining a “wait to buy” strategy in the analysis “Where I Plan to Buy Nvidia Stock Next” as we anticipated Nvidia could dip below $100. That call paid off, allowing us to secure shares at $95 and $88, again with real-time alerts to Members. Below, we present a new buy plan for you below plus a few reasons why I am (once again) saying the Street has Nvidia all wrong.