Why the Latest AI Panic Is (Mostly) a Buy
BY MICHAEL SALVATORE, EDITOR, TRADESMITH DAILY
In This Digest:
- OpenAI’s stumble rattled the market – watch these key stocks
- Our Quantum Score’s top-rated plays span far beyond tech
- Double-digit upside for the Predictive Alpha forecasts
AI is not growing fast enough…
That was the takeaway from a Wall Street Journal report on Monday.
As it showed, OpenAI has fallen short of monthly revenue targets. It also missed its goal of reaching 1 billion weekly active users for ChatGPT by the end of 2025.
The paper also reported a warning from OpenAI’s CFO, Sarah Friar. She says the company may not be able to fund its future data center contracts if revenue growth doesn’t accelerate.
Wall Street didn’t wait around to process the news. Traders hit the sell button on high-flying AI stocks.
Oracle (ORCL), which supplies the computing backbone for OpenAI’s operations, fell 4%. CoreWeave (CRWV), the AI cloud infrastructure provider that recently signed an $11.9 billion deal with OpenAI, dropped nearly 6%.
Chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) slid 1.6% and 3.3%. And Japanese tech investment firm SoftBank – one of OpenAI’s largest backers – sank more than 12%.
But as our systems are showing, there are plenty of opportunities for nimble investors within the AI trade and outside of it.
Let’s first look at the stocks that got hit hardest. Then we’ll turn to where the best opportunities are right now.
Short-Term Health says buy the dip…
Let’s start with the three stocks most directly tied to OpenAI: Nvidia, Oracle, and CoreWeave.
Our Short-Term Health indicator compares a stock’s current movement to its typical trading range to determine whether it’s in a healthy uptrend (Green Zone), a caution zone (Yellow), or a downtrend (Red Zone).
Nvidia just entered the Green Zone on a breakout. Take a look:
After spending months chopping between $125 and $200, NVDA broke out to fresh highs near $212 in recent weeks.
Tuesday’s selloff took a small chunk out of the stock price, but the trend hasn’t changed. For as long as this signal stays green, NVDA is a buy.
CoreWeave tells a similar story. Despite its wild ride since going public last spring – including a pullback of more than 60% from its June high – the stock recently recovered to the $105 range and flipped back to a Green Zone buy signal:
CoreWeave’s response to the OpenAI report was telling. The company told Bloomberg that OpenAI is a “terrific partner, but not our only one.” And it noted that its customer base includes Meta, Anthropic, Microsoft, Google, and IBM. That diversification matters – and the bullish trend data reflects it.
Oracle is the outlier… and is best avoided for now. Here’s the chart:
Oracle spent months in a Red Zone as shares decreased more than 55%. If you were following Short-Term Health, you would have avoided a loss of as much as 32%.
The stock has recently transitioned to Yellow, meaning the selling pressure has eased but hasn’t confirmed a new uptrend yet.
Oracle’s $300 billion partnership with OpenAI is one of the largest cloud infrastructure deals ever signed. Tuesday’s report didn’t change the terms of that deal. But it raises questions about OpenAI’s ability to fully utilize the capacity it’s contracted for.
The takeaway across all three stocks: A single headline doesn’t override the data. NVDA and CRWV remain in confirmed uptrends. ORCL is still rebuilding.
So follow the signals, not the panic. Tuesday’s tech smackdown presents opportunities to buy the dip.
Recommended Link
He Called Nvidia in 2016. Here’s His Next Call.
In 2016, Louis Navellier recommended Nvidia to his readers at $2.51 — split-adjusted. It went up 44,000%. The readers who acted could have made huge sums of money. Those who didn’t have been watching from the sidelines ever since. Today, Navellier says a new AI computer called “Golden Dawn” — 283 trillion times more powerful than today’s data centers — is about to create the same kind of opportunity. He’s identified the one little-known company best positioned to profit, and he’s revealing it — down to the ticker — before May 5th. Click here to watch his free presentation now.
The Quantum Score Power 10 shows opportunities abound…
One of the best ways to find opportunities on TradeSmith Finance is the Quantum Score.
It looks at stocks’ fundamental strength – think earnings, revenue, and profit margins – as well unusually large money flows in them from institutional investors. The scale runs from 0 to 100. Anything above 80 is a great stock with a lot of money flowing into it from deep-pocketed Wall Street investors – and is a buy.
Our Quantum Score Power 10 ranks the top-scoring stocks across the market. Here’s what it’s showing right now:
What stands out is the diversity. Yes, you’ve got tech names like Google parent Alphabet (GOOG) at 97.1 and semiconductor technology firm Arm Holdings (ARM) at 95.9. And Amazon (AMZN) at 95.1.
But look at the rest of the list.
Globus Medical (GMED), a medical devices company, leads the entire ranking at 98.2. Oceaneering International (OII)and Valaris (VAL) – both tied to the oil and gas drilling industry – score 95.9 and 94.3. Viking (VIK), a cruise line operator, comes in at 94.3. And Mission Produce (AVO), a fresh produce distributor, scores 94.5.
This is what a healthy bull market looks like. The strongest stocks aren’t concentrated in tech, as they were for much of 2024 and 2025. They’re spread across healthcare, energy, travel, and consumer goods, too.
If you’re looking for stocks to add to your watchlist, this is a strong starting point. Pay particular attention to GOOG and ARM in tech, OII and VAL for energy exposure, and GMED if you want to diversify into healthcare with institutional momentum behind it.
Our AI forecasting model sees double-digit upside in these five stocks – with accuracy rates above 76%…
Finally, let’s look at what our AI-powered stock forecasting model, Predictive Alpha, is flagging right now.
Large-language models like ChatGPT predict the next word in a sequence. Our Predictive Alpha tool uses similar AI technology to predict the next price move.
We trained it on more than 100 billion stock market data points to generate short-term forecasts up to 21 trading days ahead. Each forecast includes a historical accuracy rate that tells you how often the stock has actually hit its target in the past.
Every day, TradeSmith subscribers get access to a top-10 leaderboard ranked by expected move. Here are the top five by historical accuracy rate, all set to complete on May 27:
The standout is Ciena (CIEN), a fiber-optic networking company, with a forecasted move of 14.2% by May 27 – and a historical accuracy rate of 96.1%.
That means in the past, when Predictive Alpha has made a similar call on CIEN, the stock hit the target roughly 96 times out of 100. That’s an exceptionally high-confidence forecast.
Next is Enlight Renewable Energy (ENLT), a renewable energy company, forecasting 11.9% upside to $99.97, also by May 27, with a 93% accuracy rate.
What’s interesting about this list is the theme running through it.
CIEN makes the networking equipment that connects AI data centers. American Superconductor (AMSC) builds energy grid systems – which are in growing demand as data centers strain local power capacity.
Applied Optoelectronics (AAOI)manufactures fiber-optic components – essential in data centers. Even Darling Ingredients (DAR), which processes animal byproducts into renewable fuels, ties into the broader energy theme.
If you’re a TradeSmith subscriber, CIEN and ENLT deserve a close look. The accuracy rates are high, the forecasted moves are meaningful, and the underlying businesses sit at the intersection of AI infrastructure and energy demand – two of the strongest themes in the market right now.
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily
Disclaimer: At the time of this writing, Michael Salvatore held shares of GOOGL.
RJ Hamster 