Market Overview
Stocks finished mixed last week, with only the tech-heavy Nasdaq finishing lower by 0.45%. The S&P 500 and Dow Jones Industrial Average squeezed out gains, finishing up 0.08% and 0.34%, respectively. There's a defensive rotation taking place right now, and a lot of the high-flying momentum names have come down hard. Even so, there's a whole new batch of opportunities forming right now, mostly in healthcare and biotech.
Stocks I Like
Rivian Automotive (NASDAQ:RIVN) – 53% Return Potential
What's Happening
- Rivian Automotive, Inc. (RIVN) is a leading electric vehicle manufacturer designing, developing, and producing innovative adventure-ready trucks, SUVs, and commercial vans, offering investors exposure to the rapidly growing electric mobility and sustainable transportation sector with a focus on high-performance, off-road capable vehicles and charging infrastructure.
- The last quarter showed revenue of $1.56 billion, but a loss of $1.17 billion.
- This valuation on RIVN is up there. Price-to-Sales is at 3.21 and Book Value is just 4.13.
- At a technical level, RIVN is on the verge of breaking out from a cup and handle formation. This could lead to a strong surge to new multi-year highs.
Why It's Happening
- Rivian Automotive Inc. is surging ahead in the EV market with record Q3 2025 deliveries of 13,201 vehicles, marking its strongest quarter yet and driving a 78% revenue leap to $1.56 billion amid a rush of pre-expiry tax credit purchases. This momentum, fueled by heightened consumer enthusiasm and operational execution, positions Rivian as a resilient leader navigating the competitive landscape toward broader market penetration and sustained demand growth.
- Breakthrough into positive gross profit highlights Rivian’s maturing business model, achieving $24 million in Q3 2025— a $416 million swing from last year’s loss—thanks to cost efficiencies, higher selling prices, and explosive 324% growth in software and services revenue to $416 million. This pivotal shift underscores the company’s ability to monetize its ecosystem beyond hardware, building a foundation for scalable profitability in the evolving electric mobility sector.
- Anticipated R2 launch in early 2026 unlocks massive accessibility with a $45,000 price tag, poised to drive volume sales and expand Rivian’s customer base far beyond its premium R1 lineup. With validation builds slated for late 2025 and a refreshed model lineup targeting mass-market appeal, this strategic move taps into the underserved affordable EV segment, potentially reigniting explosive growth in a market hungry for innovative, adventure-ready options.
- Strategic Volkswagen joint venture infuses Rivian with fresh capital and global reach, accelerating software development and sharing EV architecture for new models while bolstering its $7.7 billion liquidity runway. This high-profile alliance not only de-risks expansion but elevates Rivian’s narrative as a tech-forward innovator collaborating with industry giants to redefine electric adventures worldwide.
- The stock is a candidate for a short squeeze with over 15% of its floated shares being sold short.
- Analyst Ratings:
- Goldman Sachs: Neutral
- UBS: Neutral
- Canaccord Genuity: Buy
My Action Plan (53% Return Potential)
- I am bullish on RIVN above $14.00-$15.00. My upside target is $23.00-$24.00.
Alphatec (NASDAQ:ATEC) – 61% Return Potential
What's Happening
- Alphatec Holdings, Inc. (ATEC) is a leading medical technology company specializing in the design, development, and marketing of innovative spinal fusion products and solutions for the treatment of spinal disorders, offering investors exposure to the rapidly growing orthopedics and spine surgery sector with a focus on advanced implants, biologics, and neuromonitoring technologies.
- The last quarterly report showed revenue of $1.65 billion, but a loss of $1.17 billion.
- Valuation is steep in ATEC. Price-to-Sales is at 4.12, while Book Value is just 0.07. Forward P/E is a high 126.58.
- From a technical standpoint, ATEC recently broke out from a broadening wedge formation, and it hasn't looked back since. This stock is accelerating in terms of upside momentum.
Why It's Happening
- Explosive surgeon adoption fuels Alphatec's ecosystem dominance, with a 26% increase in Q3 2025 bringing the total to over 700 surgeons actively using its integrated platform of biologics, implants, and enabling technologies. This network effect creates a virtuous cycle of procedure growth and market share gains, positioning the company as the go-to partner for minimally invasive spine care in a $15 billion addressable market.
- Technological innovation with the Valence platform sets Alphatec apart in robotic-assisted surgery. The upcoming 2026 commercialization of its next-generation navigation system closes a key gap in its portfolio, enabling precise, AI-enhanced procedures that boost surgeon efficiency and patient outcomes, while accelerating adoption in high-growth segments like outpatient spine interventions.
- Path to profitability and margin expansion strengthens Alphatec's financial narrative. Adjusted EBITDA guidance hiked to $83 million for 2025 reflects disciplined cost management and a 68.8% gross margin, with improving operating leverage from scale signaling a transition toward sustainable earnings as revenue diversification reduces reliance on any single product line.
- Analyst Ratings:
- Morgan Stanley: Equal-Weight
- Barclays: Overweight
- Piper Sandler: Overweight
My Action Plan (61% Return Potential)
- I am bullish on ATEC above $18.00-$18.50. My upside target is $32.00-$33.00.
A10 Networks (NYSE:ATEN) – 26% Return Potential
What's Happening
- A10 Networks, Inc. (ATEN) is a leading provider of cybersecurity and infrastructure solutions, offering advanced application delivery, DDoS protection, and secure networking technologies through hardware, software, and cloud-based platforms, providing investors exposure to the rapidly growing cybersecurity and cloud infrastructure sector with a focus on scalable threat mitigation and performance optimization.
- The company showed revenue of $196.5 million in the latest quarterly report, in addition to earnings of $4.09 million.
- Valuation in ATEN is solid for a tech stock. P/E is at 24.94, Price-to-Sales is at 4.49, and EV to EBITDA is at 16.96.
- From a charting point of view, ATEN is consolidating within a descending price channel. These are known to be continuation patterns, so I'll be watching for a break above the upper trendline of the pattern.
Why It's Happening
- A10 Networks Inc. is thriving in the escalating cybersecurity landscape, where rising threats and regulatory demands are propelling demand for its advanced application security solutions. The company’s Thunder ADC and ThreatX platforms are gaining traction among enterprises seeking robust defenses against DDoS attacks and web threats, positioning A10 as a vital player in safeguarding digital infrastructure amid the global surge in cloud adoption and remote work trends.
- Explosive Q3 2025 revenue surge underscores A10’s operational momentum and market relevance. Delivering $75 million in sales—a 5.6% beat on expectations—and $0.17 EPS exceeding forecasts by 9.7%, the company is capitalizing on renewed IT spending cycles, with its diversified portfolio driving consistent outperformance and building a narrative of reliable growth in a competitive software sector.
- Strategic alignment with 5G and AI infrastructure enhances A10’s long-term expansion story. As telecom operators and hyperscalers ramp up investments in next-gen networks, A10’s high-performance load balancing and edge security offerings are ideally suited to support seamless 5G deployments and AI workloads, unlocking new revenue avenues in underserved markets and reinforcing its role in the connectivity revolution.
- Margin expansion and profitability trajectory highlight A10’s financial resilience. With net profit margins climbing to 18.5% and guidance projecting 19.7% annual earnings growth—outpacing broader market averages—the company is demonstrating disciplined execution and scalable economics, creating a compelling case for sustained value creation as it scales its recurring revenue model.
- Analyst Ratings:
- BTIG: Buy
- Deutsche Bank: Buy
- BWS Financial: Buy
My Action Plan (26% Return Potential)
- I am bullish on ATEN above $14.75-$15.00. My upside target is $22.00-$23.00.
Market-Moving Catalysts for the Week Ahead
Government Reopen – Now What?
The reopening of the US government following the longest shutdown in history could give stocks the juice they need for a rally into year-end. Let's see if the anxieties over prolonged economic disruptions like delayed federal data releases and furloughed worker spending cuts have been fully priced in.
Estimates suggests that the shut down shaved roughly 0.2 percentage points off GDP on a weekly basis. However, stocks have historically performed well coming out of government shutdowns – but the big question is – how much of this has already been priced in?
One thing for sure is – there's a massive rotation taking place underneath the surface of the market. The leading themes from earlier this year are now starting to struggle, as setups in healthcare and financials start to blossom. The next stage of the market cycle appears to be taking hold.
How Much Longer Can the Fed Walk the Line?
It looks like another round of stimulus checks are coming for the economy. The timing is still up in the air, but most Americans will spend it away quickly. Others may opt to try their fortune in trading, which could add some more speculative flavor to the market.
In reality, the inflation story is at the mercy of commodity prices. Stimulus checks will get people spending again, and with that, the potential for money velocity (a key factor in inflation) could surge. Velocity is simply how fast money changes hands – the faster it does, the higher inflation gets.
The Fed wants to lower rates. I think they will again in December. Coupled with the end of quantitative tightening, the amount of liquidity about to be sent into the market will be astronomical. The inflation line the Fed is walking here is a very tight one – they need to tread carefully.
Sector & Industry Strength
There's been some pretty remarkable developments over the past week here, as technology (XLK) is barely holding on to its position as the top-performing sector since the start of Q3. Now we have healthcare (XLV) vying for pole position.
I'm okay with seeing healthcare's comeback – but let me be clear – this completely changes the dynamic of the market. The high-flying tech names are due for a rest here, and the more conservative names in healthcare have begun to rip.
We still see consumer staples (XLP) at the bottom of the pack – I'm glad to see this. But consumer discretionary (XLY) has slipped notably, which isn't a good sign near-term. It's pretty unstable across the board at the moment.
| 1 week | 3 Weeks | 13 Weeks | 26 Weeks |
| Healthcare | Energy | Healthcare | Technology |
Editor's Note: Healthcare's momentum is accelerating.
The New A.I. Theme (Sector ETF: IBB/XLV)
This looks to be shaping up us the strongest theme going into year-end and into the first quarter of 2026. In recent weeks, I've been highlighting the emerging strength of the healthcare sector, and how it's on the verge of taking some of the burden off the shoulders of tech.
Remember, healthcare is the second-largest sector of the S&P 500 behind tech. It's not done much over the past year. The healthcare sector hasn't hit a new all-time high since September 2024.
But it's the biotech sector (IBB) that I'm watching most closely. It falls within the broader healthcare (XLV) umbrella, and the fact that we've already broken out from the rounding bottom pattern, and created higher-highs and higher-lows is sending a signal that a new uptrend is in effect here. Biotech is going to be a big story.
What Commodity Bulls Need to See (Sector ETF: DBC/SPY)
There's a battle going on when it comes to inflation right now. Crude oil prices aren't rising meaningfully, and it's creating tension for those looking for higher prices imminently. But I want to highlight the ratio between commodities (DBC) and the S&P 500 (SPY) to illustrate how to play rising prices.
Commodities (DBC) will outperform when inflation pressures are accelerating. Stocks (SPY) will outperform when inflation pressures are present, but not increasingly on a regular basis. Hence why this ratio has been dropping for a few years now.
If inflation starts accelerating again, it'll be time to rotate back into commodities. But until then, it's better off to be overweight stocks. Keep an eye on energy prices, because if they start climbing again, I'd expect DBC to start outperform SPY by a notable margin.
Liquidity About to Get Lit (Sector ETF: LQD/IEI)
The ratio I'm sharing here, between investment-grade corporate debt (LQD) and 3-7 Year Treasuries (IEI) is my favorite when it comes to measuring market liquidity. Remember, bond markets are way bigger than stock markets. Bonds lead, stocks follow.
Now, this leadership doesn't have to be in any particular direction. Bonds can be bullish while stocks are bearish, and vice versa. In fact, they can even trend in the same direction. It just depends on the overall macro environment.
When high-quality corporate debt outperforms Treasuries, which are considered to be the "risk free" asset, it's a good signal from the bond market. It means that investors have the confidence to take on an additional level of risk. When Treasuries outperform, it signals underlying issues are rising.
My Take:
I've been monitoring this rounding bottom pattern for a couple of years now, and a breakout from this pattern would signal that liquidity conditions are set to improve tremendously. In fact, it's probably sniffing out the further rate cuts from the Fed now.
Once inflation makes its dreaded return, I would look for this ratio to start dropping hard. It would also mean that the Fed would face pressure to start raising rates again. Although based on what I'm seeing now, it seems like they would try to fight that pressure as much as possible.
Cryptocurrency
The tension in the crypto market could be cut with a knife right now. I want to focus on Bitcoin again this week because it is the tide that lifts the rest of the ships. Right now, it's desperately holding onto support in the 100,00-105,000 zone.
If this level were to break, a final washout as low as 93,000-94,000 could pan out. However, I'm not seeing the same level of vulnerability in Ethereum as I am in Bitcoin, which says a lot about the stage of this decline.
To regain its bullish momentum, Bitcoin needs to close back above 110,000-113,000. It needs to hold within the wedge formation. The leaves the door open for an upside acceleration in time. If it drops to 93,000-94,000, it may not last very long.
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