By Michael Cintolo, Vice President of Investments, Cabot Wealth Network
Alcoa (AA)
Despite less-than-optimistic forecasts for aluminum demand in 2025, the industry surpassed expectations in the latter part of the year, with relentless demand from EV, renewable energy and infrastructure end users. Heading into the new year, analysts see supply disruptions and tighter power availability in China, plus an emerging structural supply deficit, as factors supporting continued aluminum demand (and pricing) strength in 2026. Alcoa is seeing benefits from this backdrop, as rising metal prices have significantly benefited the firm’s recent financial results, with full-year net income from aluminum sales doubling in 2025, rising to around $1.2 billion for the full year. Moreover, since Alcoa is a vertically integrated producer—engaging in all aspects of aluminum production, from mining to smelting—it’s able to capture value throughout the upstream channel, further benefiting from rising prices. Last week’s Q4 earnings results underscored the bullish case for Alcoa, as the company beat estimates on both the top and bottom lines. While revenue of $3.45 billion was basically flat from a year ago, it rose 15% sequentially, with earnings of $1.26 exceeding expectations by 25 cents and adjusted EBITDA of $546 million nearly doubling on a sequential basis. The company said it maintained a “solid pace” of delivering on key operational, strategic and capital allocation objectives, while setting numerous production records, with management seeing more good things to come through 2026. Going forward, Alcoa expects an E.U. policy on carbon emissions to generate a $10 per ton positive impact for the firm’s lower-emission European smelters in 2026, while one of the firm’s critical smelting and refinery operations in Spain is expected to restart by mid-year, achieving break-even by 2027. Wall Street sees bottom-line growth of 23% this year and 15% next, both of which are likely conservative. The stock changed character in November, soaring to multi-year peaks by early January before taking a breather. We think the next big move is up.
Amer Sports (AS)
Amer Sports is the parent of 11 sporting goods brands, with outdoor clothing label Arc’teryx, Salomon in skis and shoes, and tennis and basketball gear maker Wilson the three largest, accounting for something like 90% of revenue. Niche ski and baseball brands including Atomic and Louisville Slugger round out the business. Though the brands are well known in the U.S. and Europe, Amer’s biggest growth is driven by Chinese consumers: Amer has been opening hundreds of Arc’teryx and Salomon stores throughout China, hitting a sweet spot as affordable luxury for the country’s massive and growing middle class. Wilson is seeing momentum in China, too, after China’s performance in tennis during the most recent summer Olympics sparked heightened consumer interest in the sport. Amer has opened 80 Tennis 360 stores in China, which sell gear and increasingly popular Wilson-branded apparel. Chinese consumers continue to be potent spenders even with the country’s economy on mixed footing. The success of the store concepts for its three major brands has Amer exporting the format to Australia, Europe and the U.S. These markets aren’t offering much growth these days for Amer, but they are important nonetheless and management is hoping that focusing more on its own stores can kickstart greater consumer uptake. While seeing good growth, it hasn’t been an easy year for Amer outside China, given the shock of the new tariff regime—but for all the fears, Amer’s business hasn’t really been impacted in a big way, with the exception of Wilson, which has been weak with retailers balking at higher prices. (The brand will import cheaper products to hit a lower price point for sensitive U.S. shoppers this year.) Still, assuming tariff rates stay the same, Amer has seen revenue growth accelerate and Wall Street expects the recently concluded fourth quarter of 2025 to come in 22% or so higher, with 2026 likely seeing revenue grow in the mid-teens to $7.5 billion, with improving margins driving earnings up 27%. The stock hasn’t yet broken out, but it’s set up a very nice-looking launching pad for about eight months. A decisive move above 40 would be very tempting.
Cameco (CCJ)
After a retrenchment in late 2025, the uranium sector is on the move once again as multiple catalysts—ranging from relentless AI data center power needs to ETF-related demand—push prices for the energy metal higher. A major beneficiary of this trend is Saskatchewan-based Cameco, one of the world’s top uranium miners and owner of the world’s largest high-grade uranium mine and mill, the McArthur River/Key Lake project, and Cigar Lake, located in Canada’s highly productive Athabasca Basin. With the nuclear energy sector poised to boom in the coming years, Cameco is transitioning away from being primarily a miner and toward also becoming a broader player in the nuclear energy value chain. While uranium mining remains its core business, Cameco now also provides nuclear fuel services, which includes refining, converting and fabricating fuel for end users. Integral to this transition is the company’s 2023 acquisition of a 49% ownership stake in Westinghouse Electric, a major nuclear services and technology firm. Cameco’s stake in Westinghouse allows it to expand its activities to reactor services and maintenance, as well as reactor engineering. On that score, the U.S. federal government partnered with Cameco late last year to accelerate the deployment of Westinghouse nuclear reactors nationwide. (The strategic agreement is described by management as a “transformational” long-term deal for Cameco that could support up to $80 billion in new nuclear reactor construction and related activity across the U.S. nuclear sector, with Cameco/Westinghouse being primary beneficiaries.) Meanwhile on the uranium front, Canada recently inked a $2.8 billion deal to supply the fuel to India as part of a broader nuclear cooperation between both countries, with Cameco the big supplier. That said, numbers here can be a bit lumpy—Cameco’s Q3 earnings weren’t well received by investors as revenue of $435 million fell 16% and earnings of seven cents missed estimates, driven by lower uranium and fuel service volumes, as well as by challenges at McArthur River/Key Lake. But management indicated higher uranium deliveries were seen in Q4, while analysts broadly expect a better year ahead, driven by robust uranium demand and strong contributions from Westinghouse; earnings should approach $2 per share, though deal flow will likely be just as important to investor perception. The stock didn’t do much net-net from mid-July through mid-December, but CCJ has come alive this year, with a persistent run to new highs. Earnings are due February 13, but barring a huge negative surprise, the odds strongly favor higher prices down the road.
Carvana (CVNA)
Carvana isn’t an unknown story at this point, but we remain attracted to it because it looks like a classic emerging blue chip—a relatively small outfit (compared to other big boys in the industry) that’s rapidly taking share in a gigantic ($800 billion used car) sector, and with its one-of-a-kind offering, should continue to grow quickly for years to come. The firm went wild on the spending side of things a few years ago, which nearly caused them to go under, but ironically, that buildout of capabilities (inventory, quick and often same-day delivery, marketing, etc.) and capacity (it should have the ability to sell 1.5 million cars annually at this point, which is well over twice is current rate; it has the land available to boost that to three million annually down the road as it integrates both reconditioning and auction capabilities into single sites) is a big reason it’s thriving today. And there are more advances to come, including same-day delivery (10% of customers nationwide, but in Phoenix it’s up to 40%, which shows the potential) and AI-enabled customer service, which should attract more customers. As you can see in the table below, growth has been terrific for a while, with 2026 likely to see another round of solid growth (25% to 30% on the top line, expanding EBITDA), and longer-term, the top brass thinks it can achieve three million unit sales within five to 10 years (20% to 40% compound growth) with higher EBITDA margins than today, too. If management keeps executing, there’s every reason to expect Carvana will be many times larger in the years ahead. The Q4 report is due February 18, which is a risk, but the stock acts well, with a nice breakout in December (after being added to the S&P 500) followed by a few weeks of up-and-down action. The path of least resistance is up.
Taiwan Semi (TSM)
Taiwan Semi (commonly known as TSMC) is the world’s largest and most advanced pure-play semiconductor foundry, with a ~70% market share of all global chip production, producing them on a contract basis using cutting-edge technologies like 3 nanometer (nm) and 5 nm processes that are used in a wide range of products and applications, from smartphones and AI to data centers and high-performance computing (HPC). It also produces chips for some of the world’s biggest tech companies, including Apple, Nvidia and AMD. Thus, it’s a direct play on the current chip boom (mostly AI but many other areas, too), which is producing fantastic results, including in Q4, with sales up a strong 25% and earnings surging 41%, topping estimates. The latest results underscore the sustained demand for the company’s chips used by global AI, cloud computing and HPC customers, which are increasingly consuming leading-edge process nodes that are essential for high-performance AI accelerators, data-center processors and premium smartphones. The strong trends increased the company’s confidence in expanding capacity at its fabs in the U.S. and Japan to meet rising demand, while also justifying recent investments for new production in Europe (mainly to support automotive, IoT and industrial semiconductor applications). Moreover, Nvidia’s management said it has asked for additional chip supplies from TSMC based on strong AI-related demand, so the company clearly has multiple tailwinds heading into the New Year. Even better, the U.S. recently granted TSMC Nanjing an annual export license that allows U.S. export-controlled chip making products to be shipped to China without the need for individual vendor licenses (a reason for the stock’s latest show of strength). Analysts see another round of 30%-plus earnings growth in 2026, which has kept the buyers interested—shares built a modest two-month base into year-end but broke out after the calendar flipped, which should lead to another solid run.
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About Cabot Wealth Network
This report is published by Cabot Wealth Network which was founded in 1970 by Carlton Lutts, a disciplined investor with an engineering mind who developed a proprietary stock picking system using technical and fundamental analyses.
Since then Cabot Wealth Network, headquartered in Salem, Massachusetts, has grown to become one of the largest and most-trusted independent investment advisory publishers in the country, serving hundreds of thousands of investors across North America and around the world.
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