AI’s Summer Liftoff Has Arrived VIEW IN BROWSER BY LUCAS DOWNEY, EDITOR, TRADESMITH’S ALPHA SIGNALS The good times keep rolling… Stocks are gapping higher day by day as the rally broadens out… And dips are broadly bought with gusto. Last week I highlighted how the Nasdaq formed a “golden cross,” and how that spells good fortune for equities. Today we’ll add to this thesis with a look at the S&P 500’s own recent golden cross. Similar to the Nasdaq, these strong up-moves in markets are not only rare, but profitable. As you’ll see, it should pay to lean bullish as the market heals from the thrashing in April. I’ll also offer up one powerful AI play to ride the positive momentum in the coming months. It’s yet another golden opportunity for traders looking to bet on the upside… S&P 500 Makes First Golden Cross in Over Two Years One month ago, the S&P 500 had its best May performance since 1990, jumping 6.2%. Noting that big jump, we dug deeper and found that big Mays often lead to big returns in June and July. That call didn’t disappoint, as the market has climbed 5.47% from the close of May. Even better news: That powerful thrust has triggered a golden cross formation. A golden cross occurs when the 50-day moving average crosses above the 200-day moving average. This indicates how near-term momentum has rallied higher, outstripping the longer-run average. Here you can see the golden cross for the S&P 500: 
You’ll notice that the 50-day moving average was above the 200-day moving average for a big portion of the last 12 months before the April collapse. So the golden cross is the first new crossover since December of 2022… right before the start of the powerful, AI-led bull market we’re in now. The big question for traders is simple: What happens after a golden cross? We went back over the last 30 years and found 14 prior instances of a golden cross on a weekly closing basis. You’ll notice that the average forward performance is in line with expected market returns. However, given 2025 is setting up a lot like the COVID-19 crash and rally, I think it’s important to focus on more recent data since 2009. Since 2009 when the S&P 500 formed a golden cross on a weekly closing basis: - 3 months later equities climb 6.5% on average
- 6 months after returns jump to 10%
- 12 months after a golden cross, the S&P 500 gains 14%
So like last week, the message is clear. Prepare for more upside… But be choosy with your stocks. Bet on big themes from companies with solid businesses and growth prospects. One such AI stalwart is none other than the biggest company in the world: Nvidia (NVDA). You know the company from its groundbreaking chips powering the most advanced AI infrastructure projects. Business has been so strong for AI reasoning and large language models that Nvidia’s revenue more than doubled in fiscal year 2025, to $130.5 billion up from $60.9 billion in FY 2024. Over the same period, operating income jumped 147% to $81.5 billion in FY 2025 from $33 billion in FY 2024. With fundamental performance like this, it’s no surprise why the stock has nearly doubled the S&P 500 over the last year… 
Keep it simple. Focus on great stocks when market tailwinds warrant. And the S&P 500 golden cross aligns with another bullish signal: strong seasonal strength this summer. By utilizing TradeSmith’s seasonality tool, we can easily see that we’re right in the middle of a seasonally strong period for NVDA stock, lasting through Aug. 22: 
Further, we can look at how NVDA has performed from now through the end of this seasonally strong period for the last 15 years: The stats show an 80% accuracy rate and 6.69% average return in the remainder of this seasonal window: 
Now let’s do one final checkup on Nvidia… By using Jason Bodner’s Quantum Score, we see that Nvidia is rated 82.8, which is easily in the buy zone. Any company scoring highly on technicals and fundamentals is the go signal. That seals the deal for me. The QS gives an instant ranking of any company, giving you the confidence you need before making a trading decision: 
If you’ve leaned long since April, great job! If you are still on the sidelines, hopefully this data-driven outlook for the S&P 500 gives you more confidence. And if you think NVDA has already run away from you, think again. Regards, 
Lucas Downey
Editor, TradeSmith’s Alpha Signals P.S. Back in 2016, almost nobody was talking about AI. If you can even believe it, NVDA was trading at less than $1 per share after adjusting for stock splits. But my friend and colleague Louis Navellier saw the potential for Nvidia to play a huge role in the coming AI revolution. And after he recommended NVDA to his readers, the stock went on to soar an incredible 13,544%. 
Louis still thinks Nvidia is critical to the AI boom. But he also thinks you won’t find truly life-changing gains in this stock anymore… nor will you find them in the likes of Microsoft, Amazon, or other Mag 7 favorites. For those kinds of returns, you need to target the under-the-radar AI plays… the stocks that Wall Street and the mainstream financial media are not watching. Even more interesting: Now that President Donald Trump signed his massive tax bill, he’s set to hold an unusual event later this month that’s all about what the government will do to boost the AI space… And on Wednesday at 8 p.m. Eastern, Louis will give you the name and ticker symbol of one of the top “hidden” AI stocks – completely free of charge. If Trump’s big AI event delivers, you’ll want to consider getting in position ahead of time… All you have to do to get the info for free is click here to automatically sign up for his urgent AI briefing. If you didn’t take advantage of the NVDA trade back in 2016, this is your second chance to see multiples on your money. Click here now to instantly reserve your spot in Wednesday’s briefing and get ready for the next chapter of the AI boom. | 
