AI Healthcare Is Here, and This Stock Is Set for More GainsVIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest:
Anthropic’s Claude is now doing medical research A seasonal sweet spot for this AI healthcare stock Another AI chokepoint trade – a new signal just fired on this optics stock AI just changed medical research forever…Last Tuesday, Anthropic – the AI lab behind the popular Claude models – launched a product called Claude Science. It connects to more than 60 scientific databases and lab tools – the kind of thing researchers used to have to piece together by hand – so they can run experiments and analyze results in one place instead of jumping between a dozen programs. One of the first labs to use it, a brain-tumor research team at UC San Francisco, ran a set of genetic tests in one-tenth of the usual time. It’s one of the themes we’ve been covering at the Daily. Most folks still think of AI models as chatbots. But they’re starting to do real work in industries like cybersecurity, defense, and medicine. Researchers are already using drug discovery models like Google DeepMind’s AlphaFold2 to find promising new drugs without years of trial and error in the lab. Multiply that with the time savings that Claude Science adds to the mix, and you get treatments reaching patients years sooner than they would have otherwise. Faster research means lower costs and fewer wasted years chasing dead ends – ultimately showing up on medical science companies’ bottom lines. And investors are starting to notice. These five medical science stocks just flashed green…Every morning, I look for the highest-quality stocks – according to the fundamental side of our Quantum Score – that are also trading at one-month highs. It’s less about picking one great stock and more about spotting where money is moving. When several strong companies in the same corner of the market all hit new highs around the same time, that’s usually not a coincidence – it’s a sign investors are waking up to a theme. This morning, five of the strongest names on that list all came from the same place: medical science.
United Therapeutics (UTHR) – Makes treatments for rare, life-threatening lung and heart conditions Incyte (INCY) – A cancer-drug maker known for its blood-cancer and skin treatments Neurocrine Biosciences (NBIX) – Develops medicines for brain and hormone disorders Exelixis (EXEL) – An oncology company whose flagship cancer drug drives most of its sales Medpace Holdings (MEDP) – Runs the clinical trials drugmakers rely on to get new medicines approved Medpace is worth a closer look. It doesn’t discover new treatments – it runs the trials that prove other companies’ treatments work. And it’s already using AI in its imaging lab to read scans from trials faster and more reliably than a human radiologist alone. And according to our Seasonality tool, now is a great time to buy.
Medpace is in a seasonally bullish window until July 23…If you’re not familiar with how it works, our Seasonality tool looks back over a stock’s history and maps when it has tended to rise or fall at the same point on the calendar, year after year. No tool can tell you with 100% accuracy what a stock will do tomorrow. But knowing what it’s usually done at this exact point on the calendar, year after year, stacks the odds of success in your favor. Medpace is in a seasonally bullish window until July 23 – a stretch it has finished higher in every one of the past 10 years, for an average gain of 16.9%. 
And over the remainder of this window – from now until July 23 – it’s averaged an 8.7% gain. Add Medpace to your watchlist and treat July 23 – the close of its seasonal window – as a natural exit. If you’re a paid-up Trade Cycles subscriber, pull the other four stocks up on the TradeSmith Finance platform and see which ones are showing similar patterns. A new Signals trade just fired on this AI optics stock…If you’ve been following along in these pages (catch up here and here), you’ll know we’re bullish on five AI chokepoints. These are critical bottlenecks in the AI supply chain – the parts of the buildout that have to get fixed, or the whole thing grinds to a halt, no matter how much money gets thrown at it. One of the least understood is silicon photonics. Right now, data moves around inside AI data centers as electrical signals, racing through copper wires. But copper has limits – it generates heat and slows down as data centers get bigger. Silicon photonics solves that by moving data as pulses of light instead, letting it travel faster and cooler. And our Signals trading software just flagged a bullish setup. Fabrinet (FN) doesn’t design its own products. It’s a precision manufacturer other companies rely on to build the optical parts that move data at the speed of light, both inside AI data centers and between them. Over the past 12 months, this stock gained as much as 160%. But then it hit a wall. Fabrinet has rolled over into a 30% slump over the past couple of months: 
Then at the start of this month, it fell 9% in a day. And that caught the attention of our AI-powered trade-detection system. A signal is a combination of factors that, when it’s appeared before, has typically led to gains. Our system scans more than 2,000 stocks for 180 different entry signals. Then it creates a leaderboard of the best trade setups. For Fabrinet, the pattern it flagged is a 6.5% fall or more in a day. Going back 10 years, FN has done that 48 times. Eighty-seven percent of the time, this has been followed by an average gain of 5.4% over the next eight trading days. When it won, the average gain was 6.7%. When it lost, the average loss was just 3.3%. You can say what you like about this particular drop and what caused it. What the data shows is that a steep-one day drop in Fabrinet happens on average five times a year. About nine times out of 10, these sharp drops have been a great time to buy. If you’re looking for a short-term trade, Fabrinet is worth a close look, with the eight-day window this signal is built around as your time frame. And if you’re a paid-up Signals subscriber, pull up FN on the TradeSmith Finance platform and check where it sits on Short-Term Health before you act – a Green Zone would add confirmation to the bounce this signal is pointing to. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily |
