BUZZ Investing: Markets Navigate Policy Shifts

During the recent period between index selection dates (January 8, 2025 – February 12, 2025, the “Period”), financial markets were shaped by political developments, central bank policy, and significant disruption in the technology sector. President Donald Trump’s inauguration marked the beginning of an active policy agenda, with a series of executive orders and legislative initiatives focused on trade, corporate taxation, tariffs, and regulatory changes. While these actions provided some clarity on economic priorities, investors continued to assess their broader implications. Meanwhile, the Federal Reserve, in its January 29 meeting, maintained its benchmark interest rate at 4.25%–4.50%, emphasizing a patient, data-driven approach. Fed Chair Jerome Powell reinforced the central bank’s commitment to inflation management while acknowledging risks to economic growth, setting the stage for potential policy friction with the new administration. Market volatility remained elevated as investors weighed these factors alongside inflation concerns and the evolving interest rate outlook.

A defining event in the technology sector was the emergence of DeepSeek, a Chinese artificial intelligence firm, which introduced a suite of large language models (LLMs) that rivaled those of leading U.S. companies at significantly lower costs. The announcement triggered a sharp repricing in the sector, with Nvidia declining 17% and the Nasdaq Composite falling nearly 3% in a single session as investors reassessed AI leadership and competitive pressures. Meanwhile, geopolitical tensions, particularly in Ukraine, drove gold prices to record highs, reinforcing a risk-off sentiment in certain market segments. The “Magnificent Seven” tech stocks struggled, with most underperforming except for Meta, which surged nearly 19% during the Period. Despite challenges in the tech sector, the S&P 500 remained near its all-time high, buoyed by resilience in other sectors. While the Nasdaq initially suffered from AI-related disruptions, both it and the broader equity indices finished the Period higher, supported by international market strength and ongoing confidence in the economic outlook.

The BUZZ NextGen AI US Sentiment Leaders Index ("BUZZ Index") returned 2.66% during the month of January compared to a return of 2.78% for the S&P 500 Index during the same period.

Shares of Palantir Technologies pace BUZZ Index Gains

Palantir Technologies’ (NASDAQ: PLTR) stock surged 72% during the recent period, driven by strong earnings, upbeat guidance, and growing demand for its AI and defense analytics solutions. The company’s results exceeded expectations, highlighting robust commercial growth and reinforcing confidence in its long-term trajectory. Unlike AI hardware firms that faced volatility after China’s DeepSeek AI announcement, Palantir remained resilient. While DeepSeek raised concerns about AI commoditization, Palantir’s pricing model and focus on operational AI insulated it from price pressures. The company positioned itself as a strategic AI partner, emphasizing integration and decision-making over raw model capabilities. Palantir’s deep government ties, particularly its work with the Department of Defense, also bolstered investor optimism amid rising federal defense spending. Wall Street analysts raised price targets, citing its strong positioning in AI-driven decision-making. Broader enthusiasm for AI, including the Oracle-OpenAI-SoftBank-backed ‘Stargate’ initiative, further fueled momentum, solidifying Palantir’s role as a leader in applied AI.

Top BUZZ Index Contributors: January 8, 2025 – February 12, 2025

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

Shares of Trump Media & Technology among declining stocks in the BUZZ Index

Shares of Trump Media & Technology Group (NASDAQ: DJT) fell during the recent Period, dropping nearly 12% as post-election enthusiasm waned and investor concerns over fundamentals resurfaced. The stock had surged following Trump’s victory, driven by speculative buying, but the rally lost steam after his inauguration as investors took profits amid renewed skepticism about the company’s long-term viability. Adding to the pressure, Trump’s launch of the $TRUMP cryptocurrency token raised ethical concerns and potential regulatory scrutiny. The token’s 48% decline over the past week further dampened confidence, fueling uncertainty around its implications for Trump's broader business ventures. While some investors see long-term potential in Trump’s continued use of Truth Social as a direct communication platform, DJT’s stock remains highly volatile. Its future will likely be shaped by political developments, regulatory factors, and market confidence in the company’s ability to sustain growth beyond Trump’s presidency.

Bottom BUZZ Index Contributors: January 8, 2025 – February 12, 2025

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

BUZZ Index February 2025 Rebalance Highlights

Hims & Hers Health Inc.

The rise of telehealth has transformed the healthcare industry, with companies rapidly adopting digital-first solutions to meet growing consumer demand. Hims & Hers Health (NYSE: HIMS) has been at the forefront of this shift, leveraging its direct-to-consumer model to expand access to personalized treatments for weight management, mental health, hair regrowth, and sexual wellness. The company has particularly benefited from the growing acceptance of prescription weight-loss medications, fueled by the widespread popularity of GLP-1 drugs like Ozempic. Investor enthusiasm for HIMS has surged alongside its business momentum, with shares climbing more than fivefold since 2024, including doubling in the first two months of this year. The company further capitalized on its visibility with a high-profile Super Bowl commercial, which drove a spike in consumer engagement. This rising traction has also translated into increased recognition among online investors, with HIMS' weighting in the BUZZ Index climbing from 1.57% in January 2025 to 2.79% this month, reflecting its growing influence in the telehealth space.

IonQ Inc.

Since the turn of the millennium, the world has experienced two major technological revolutions: the explosion of the internet and the rise of artificial intelligence. With AI reaching mainstream adoption just two years ago following the launch of ChatGPT, the next breakthrough may already be taking shape—this time in quantum computing. For decades, quantum mechanics was purely theoretical, but recent scientific advancements have brought practical applications closer to reality. If fully realized, quantum computers could process information millions of times faster than today’s most advanced supercomputers. While widespread adoption remains years away, groundbreaking progress by Google and NASA has fueled a surge of interest in the space, driving investor enthusiasm toward companies like IonQ, Inc. (NYSE: IONQ). Founded in 2015, IonQ went public in 2021 through a SPAC merger with dMY Technology Group III. After an initial wave of excitement, the stock struggled to gain momentum, with interest fading as quantum computing remained in its early stages. However, recent breakthroughs have reignited enthusiasm, propelling shares more than 16 times higher from their post-merger lows. This month, IonQ ranks within the top 25 names in the BUZZ Index, holding a 1.47% weight, as investor confidence in quantum computing continues to grow.