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Chicago, IL – June 3, 2025 – Today, Zacks Investment Ideas feature highlights Nvidia NVDA, CoreWeave CRWV, Amazon AMZN, iShares Bitcoin ETF IBIT and D-Wave Quantum QBTS.
Despite the recent flurry of tariff news and economic uncertainty portrayed by pundits, several key indicators are flashing bullish signals, including:
The “GDPNow Model” is a model created by the Federal Reserve Bank of Atlanta to provide a real-time estimate of the current quarter’s Gross Domestic Product (GDP) growth. Through its “Nowcasting” model, the GDPNow Model leverages a purely data-driven model that interprets current data to predict the future instead of simply predicting future economic conditions.
Between the first negative GDP reading in several quarters, an escalating trade war, and negative sentiment, the GDP picture looked quite bleak. However, the current market environment illustrates why savvy investors rely on data-driven predictive models to eliminate bias and find the hard truth. In the latest reading, the GDPNow Model for real GDP growth (seasonally adjusted annual rate) in Q2 2025 is a robust 3.8%, up from 2.2% in the last reading.
The PCE Price Index (Personal Consumption Expenditures) number was released Friday. The reading came in at a 2.1% gain year-over-yea,r which was softer than Wall Street expected. The key inflation rate hit a 4-year low.
Meanwhile, “Supercore PCE,” which measures the price of “core services,” saw its first negative reading since COVID. The latest inflation reading shows that President Trump’s tariff policy has not negatively impacted prices (at least yet.) With PCE near the Fed’s 2% target, investors should expect rate cuts in 2025 – a bullish development for stocks.
Bull markets are driven by high-growth industries, and currently, the industry with the most innovation and the highest growth potential is the artificial intelligence (AI) space. Within the AI industry, Nvidia, the semiconductor leader, is the most important stock. In fact, without Nvidia’s GPUs, it’s impossible to be an AI leader.
The company’s earnings report in late May showed that there is plenty of room for the industry left to grow. Revenue bolted 69% year-over-year to $44 billion despite a $4.45 billion charge attributed to H20 product export restrictions to China. Despite the uncertainty in the macro trade environment, Zacks Consensus Analyst Estimates suggest that top and bottom-line growth will continue to grow at a healthy clip in the mid-double-digits.
Meanwhile, other AI industry leaders echo Nvidia’s significant growth. For instance, fellow AI leader and recent IPO CoreWeave reported Q1 revenue of $982 million, a fourfold year-over-year increase. Meanwhile, the Amazon AWS Chief reported Friday that AI cloud sales have reached multiple billions.
Bitcoin and bitcoin proxies likeiShares Bitcoin ETF have been valuable tools for investors to leverage as a leading indicator. For instance, IBIT topped on December 17th, 2024, well before the S&P 500 Index topped in February 2025. Now, IBIT is breaking out to new highs well before the major US equity indices. Could they follow next?
Meanwhile, other risk-on areas of the market are showing that the “animal spirits” are alive and well. For example, quantum computing leader D-Wave Quantum is up nearly 70% year-to-date.
The general market exhibits a massive change of character over just the past month or two. For instance, Friday, President Trump said on social media that “China’s has totally violated its agreement with the US.” Earlier in the year, stocks would have plunged on this news. However, this time, the market opened lower by around 1%, only to quickly find buyers and finish the session green. Brushing off bad news is a hallmark of a bull market and is a subtle clue for savvy investors that the market is resilient.
Now, the S&P 500 is setting up a picture-perfect daily bull flag pattern.
The confluence of strong economic indicators, the AI revolution, and the market’s resilient behavior point to a market where bulls are in control.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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