Orion AI picked five $QQQ ( ▲ 1.54% ) stocks for our watchlist this week after the release of July CPI data. They are $ASML ( ▲ 2.65% ), $PYPL ( ▲ 3.48% ), $NOW ( ▲ 1.12% ), $COST ( ▼ 1.15% ) and $ADBE ( ▲ 2.45% ).

Scores: Fundamental 7 | Analyst Sentiment 9 | Valuation 4 | Catalyst 8 | Technical 7 | Total: 35

Trade Suggestions: Long Breakthrough | Entry: 758.0 | TP: 790.0 | SL: 745.0 | Confidence: 7

Investment Thesis:

ASML Holding N.V. presents a compelling long opportunity, driven by its unparalleled monopoly in advanced lithography, which is critical for the semiconductor industry's long-term growth, particularly fueled by AI. Despite management's cautious near-term outlook for 2026 due to macro and geopolitical uncertainties, the recent positive news regarding U.S. tariff exemptions and a zero-for-zero tariff agreement on semiconductor equipment significantly de-risks the trade environment. Analyst sentiment is overwhelmingly positive, and technical indicators are showing a clear shift towards bullish momentum. While the valuation appears stretched relative to peers, ASML's unique and indispensable market position, coupled with robust long-term growth prospects, justifies a premium. A tactical long position, initiated upon a confirmed breakthrough of key resistance levels, is warranted, with a focus on disciplined risk management.

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Scores: Fundamental 6 | Analyst Sentiment 7 | Valuation 8 | Catalyst 7 | Technical 6 | Total: 34

Trade Suggestions: Long Normal | Entry: 67.9 | TP: 75.0 | SL: 64.0 | Confidence: 7

Investment Thesis:

Based on a comprehensive analysis, PayPal presents a compelling long opportunity for both a tactical bounce and a longer-term value investment. Fundamentally, the company is highly profitable with robust ROE and accelerating forward EPS growth, trading at deeply undervalued multiples compared to its peers. Management is confidently executing a strategic transformation, with Venmo showing strong re-acceleration and significant cost savings expected from restructuring. While recent market sentiment has been negative due to concerns over muted branded volume growth and short-term cash flow lumpiness, these appear to be temporary headwinds rather than a fundamental deterioration. Technically, the stock is in a clear downtrend but is deeply oversold, indicating a high probability of a mean-reversal bounce. The current price offers an attractive entry point for a short-term trade targeting key resistance levels, while the underlying value proposition and long-term catalysts support a sustained investment.

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Scores: Fundamental 9 | Analyst Sentiment 9 | Valuation 2 | Catalyst 9 | Technical 4 | Total: 33

Trade Suggestions: Long Normal | Entry: 853.8 | TP: 942.0 | SL: 840.0 | Confidence: 6

Investment Thesis:

ServiceNow (NOW) presents a compelling long-term investment opportunity driven by its leadership in enterprise AI, robust financial performance, and strategic market expansion. The company consistently delivers strong revenue growth and profitability, with high customer retention and a clear roadmap for AI monetization through products like Now Assist. Analyst sentiment is overwhelmingly positive, reflecting confidence in NOW's ability to capitalize on the accelerating demand for AI-powered business transformation. However, the stock trades at an extremely high valuation, which is a significant short-term risk. Technically, NOW is in a downtrend and underperforming the market, although its oversold RSI suggests a potential short-term bounce from current support levels. While the long-term narrative remains strong, a tactical approach with disciplined risk management is advised for the coming week, focusing on a potential rebound from oversold conditions rather than a sustained trend reversal.

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Scores: Fundamental 7 | Analyst Sentiment 6 | Valuation 2 | Catalyst 5 | Technical 6 | Total: 26

Trade Suggestions: Short Normal | Entry: 988.8 | TP: 979.3 | SL: 995.0 | Confidence: 5

Investment Thesis:

Costco Wholesale Corporation is a fundamentally robust, world-class retailer with a resilient membership-based business model, consistent revenue growth, and excellent financial health. Management is confident and strategically investing for long-term growth, as evidenced by strong Q3 FY2025 results and the establishment of a Global Capability Center. However, the stock is currently trading at an extreme valuation premium, with P/E and PEG ratios significantly above historical averages and peers, making it severely overvalued. While analysts are generally positive on the business, their price targets offer limited upside, and research reports highlight the unsustainable valuation. Immediate headwinds include new U.S. tariffs on Indian imports, which could pressure margins and supply chains, and general macroeconomic uncertainty. Technically, the stock is in a bullish trend but shows short-term overbought signals, suggesting a potential pullback. Given the severe overvaluation and immediate tariff-related risks, a tactical short position is recommended for the coming week, targeting a pullback to key support levels, while acknowledging the long-term quality of the underlying business.

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Scores: Fundamental 6 | Analyst Sentiment 6 | Valuation 4 | Catalyst 3 | Technical 3 | Total: 22

Trade Suggestions: Short Breakthrough | Entry: 329.0 | TP: 300.0 | SL: 345.0 | Confidence: 3

Investment Thesis:

Adobe presents a challenging investment case. Despite robust financial performance, confident management, and a clear long-term AI strategy, the company faces significant near-term headwinds. The Figma IPO saga, intensifying generative AI competition, a recent analyst downgrade, and ongoing legal challenges are creating substantial negative sentiment and strategic concerns. Technically, the stock is in a strong downtrend, and while oversold, any bounce is likely to be short-lived and capped by resistance. The valuation, while appearing reasonable on an absolute basis, is considered less attractive relative to peers. Given the confluence of strong negative catalysts and bearish technicals, a cautious approach is warranted. The immediate outlook suggests continued pressure, making a short-term long position highly risky. A short position, or waiting for a clearer reversal signal, would be more prudent.

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