Top 5 Opportunities
My favorite opportunities on the market for this year
If you haven’t read yesterday’s write-up, you have to; it serves as the foundation for today’s.
I will detail the five best opportunities I see in the market today and for the year, following my system’s framework: Fundamentals, Narratives, Entry Price, Target, and Timeframe.
A clear why and how with five high R:R (Risk/Reward) opportunities, effective today.
Transmedics
I’ve been saying this for months but comes a time when expansion is inevitable after months of compression as fundamentals remain damn strong.
Fundamentals & Narrative.
TransMedics is the most significant innovator in the transplant industry, offering an end-to-end service with "warm organ" conservation hardware. The company enabled the market to expand, improving organ collection and transplant quality. It now is undergoing FDA clinical studies for its new lung and heart hardware, while also developing kidney hardware and expanding into Europe.
There isn't a complex narrative here but the stock has some advantages compared to many others; A defensive sector, not concerned by AI, spending, tariffs, geopolitics, consumer spending, recession… Great diversification.
Investment Plan.
My assumption is that TransMedics is a $150+ stock, probably closer to ~$180 before year-end and above $200 by end 2027, assuming solid - not even perfect, execution. My model suggests even higher in a bull case, but I prefer to stay conservative with my "optimistic base case."
From today’s $125, we are looking at ~50% returns in my base case and over 100% in my bull case within ~1.5 years.
Price action-wise, the stock has a strong support on its weekly 50 holding for more than a year by the market and the CEO himself who bought millions of dollars worth of shares at ~$116.
The risk/reward on this stock is unequalled - although our patience is tested… Even assuming a 10% drawdown as a stop-loss, you are looking at a 4:1 ratio based on conservative optimistic assumptions, and up to 10:1 in a bull case over two years.
Add to this its defensive characteristic; I’m not sure you can find much better in the entire market.
SolarEdge
Once a market darling, this sector is now completely ignored.
Fundamentals & Narrative.
A cyclical sector hammered by high interest rates. SolarEdge enables residential solar installations by selling hardware systems. Demand for energy autonomy is a logical long-term trend and current geopolitical conditions will just push the narrative even more in the next months.
Plus some structural improvements within the company with better products quality, upcoming lower interest rates and constant demand, the narrative should rapidly materialize in the financial results.
Investment Plan.
The stock is down 90% from its ATH. That isn't to say it must return there, but to highlight how violent the market was - from ridiculously high to ridiculously low.
The stock is now holding its W50 and pushing higher on improving results and returning demand - and soon a noisy narrative. My personal target is ~$100 with a two-year timeframe and a stop-loss below ~$28.
There is a solid R:R here, but it carries execution and external risks (tariffs and rates). It offers a higher R:R than TransMedics based on expected returns but with a much higher risk profile, hence why it is only second.
Nordic Semi
This is one of the few AI hardware narratives which didn’t start yet: AI Wearables.
Fundamentals & Narrative.
AI wearables require extreme optimization for both compute and battery life, a complex task even for non-AI devices, so when you add intense AI compute… This was highlighted by the Meta Smart Glasses which only have a few hours of life in usage. Not cool for glasses.
Wearables are the future. AI is also the future. Meta’s glasses are selling out, and production is expected to triple by FY26 while other tech giants enter the game, and Nordic has the best-in-class products for all of them.
Investment Plan.
The 2022 cycle ends and we are starting a new one. The stock has been making clear higher highs for months and held up well recently while other tech stocks struggled.
If the cycle ramps up as expected, this stock has ~100% upside over the next 18 months, easily. A close below the current higher low (~15% below today’s price) would invalidate the trade. This offers a ~6:1 R:R at a healthy on a not "cheap" valuation but within a strong narrative of the tech hardware market.
Solid, although again, it comes with execution risks plus a constant demand for those AI wearables, even growth.
Nebius
I’ve been wrong. I haven’t followed the system I preach. I am aware of the irony: “Do as I say, not as I do.” But I am back now.
Fundamentals & Narrative.
I am implementing more safeguards to avoid repeating past mistakes. That said, Nebius is an amazing opportunity, even more after Nvidia’s $2B investment.
Compute demand is massive, and providers are supply-constrained. Nebius is emerging as a top-tier provider due to its focus on full-stack quality. While the previous narrative focused on "unhealthy" spending and indebted customers, Oracle’s latest quarter combined with OpenAI new funding started to shift market’s perception of the sector.
If that happens and the market starts another leg up on the sector following constant growth and demand for compute, Nebius is a prime candidate for returns with analysts’ average target pointing to ~$160, as high as $290 for the most bullish.
Investment Plan.
The reason Nebius isn’t higher on my list is the R:R volatility. I’ve decided to buy again due to the massive volume and breakout following Nvidia’s investment, rewarded by a 17% jump in three days.
Breakout and high volume is a signal that buyers are accepting higher prices.
Price action matters, yeah.
This also means the conditions to close the position based on price action are more blurry without clear bottom, except for one ~25% lower. Vertiginous, but the opportunity remains massive here for a bull who sees a path to $250+, which I believe possible with a combined great execution - factual, and the return of a bullish narrative on compute demand and financial health - potential.
That being said, I would never have been in this situation if I had followed my system as I should, and held/bought more on the weekly 50 ~$90.
Edit: I wrote this Sunday before the announcement of Meta’s deal up to $27B which of course pushed the stock even higher. A great example of price action’s importance. I bought because of a large breakout on large volume. Price action anticipates.
Alibaba
This isn’t another compute play; it is a diversification and deep value play.
Fundamentals & Narrative.
Alibaba is to China what Google is to the West: a vertically integrated AI/tech giant. They own the hardware, software, logistics, and the customer base. The price is currently suppressed for two reasons:
The “China Discount” (Geopolitical risk).
Unfair growth comparisons.
Assuming cloud growth continues, Alibaba should be a 15%+ revenue growth company trading at the multiple of a dying e-com despite its accelerating AI verticals. A Western company with these metric would trade at $300. The China discount will always exist but a $200 is very reachable this year.
Investment Plan.
My concern is that it lost its W50 for two weeks now, mostly on geopolitical tensions on Iran while "propaganda" about Taiwan aren't helping.
China is supposed to be Iran’s ally; the reality is that they are opportunistic; they won’t support one if the cost outweighs the benefit.
Narratives and price action have little to do with Alibaba. But the market trades on narrative and sentiment so we cannot ignore them, and I I do not buy or hold a stock below its W50.
I will look to buy again if the price pushes back above that level in the coming days, which could happen with earnings this Thursday. For now, it’s a wait and see situation, with a high potential if the world were to quiet.
Disclaimer: I am not a licensed financial advisor, analyst, or broker. This content reflects my personal opinions and investment decisions for informational and educational purposes only. I hold positions in securities discussed and may buy or sell without notice. Nothing here constitutes a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results.
Always conduct your own research and consult a qualified professional before making investment decisions. I accept no responsibility for any financial losses.