Shesa's SEPTEMBER 2025 - Investment Blog

 By Shesa Nayak

Welcome to Shesa’s Blog

U.S. Stock Market Update 

The stock market had a reasonably good August despite some pullback at the end of the month. For the month of August, NASDAQ was up 1.6% for the month, S&P 500 was up 1.53%, fourth straight positive month and DOW soared 3% for the month. Though September is the worst month in the stock market, so far the S&P 500 is up 0.33%, and Nasdaq is up 1.14%. The Q2 earnings season is over. Nvidia and AVGO had another great quarter and fabulous guidance. It reminds us that AI is well and alive and will remain so in the foreseeable future. Having said that, it makes sense to be vigilant in September and possibly early October. September in general does not have good history for the stock market, so we have to strategize our investment decision. 

Economic

Gross domestic product (GDP) jumped 3.3% for the second quarter. All the inflation numbers viz. CPI, PPI and PCE have gone up, consumer spending rose 1.4%, Personal consumption expenditure (PCE) came higher at 2.6%. The NonFarm Payroll was up mere 22,000 vs. 75,000 expected and unemployment went up to 4.3%. But the earnings were really good particularly from the big tech companies and overall Q2 earnings were up 11.9% surpassing all forecasts. So, earnings are still good but economic in general has not been great as inflation keeps ticking up. 

Federal Reserve & Rate Cut

Despite the fact that inflation has been ticking up due to tariff impact and fear, Wall Street is expecting 98% probability of a 0.25% Fed rate cut on September 17. The main reason is deteriorating labor market and real estate market. Even if they cut rate, if the inflation keeps ticking up then market may still get jittery. Because future rate cuts may be pushed further and market may not like that. Hence, it’s important to observe the new development and determine our investment strategy accordingly. This week we will get to see PPI on Wednesday and CPI on Thursday. These numbers are of paramount importance for future rate cuts.

What lies ahead in September?

Well, historically September has not been very kind to the stock market and investors in general. If the inflation keeps ticking up then market may become very volatile till tech earnings comes out in October. I will discuss the September effect later but before that let’s have a quick glance to U.S Stock market indexes. 

Indexes	Close TUE 12/30/24	Close FRI 9/5/25	Change in 2025	% Change in 2025	All Time High	From All Time High	% from All Time High
DOW	42,544.22	45400.86	2,856.64	6.71	45,757.84	-356.98	-0.78%
S&P 500	5,881.63	6481.5	599.87	10.20	6,508.23	-26.73	-0.41%
NASDAQ	19310.79	21700.39	2,389.60	12.37	21,803.75	-103.36	-0.47%
Russel 2000	2,230.16	2,391.05	160.89	7.21	2,466.49	-75.44	-3.06%
SOX (Semi)	4,979.93	5,761.40	781.47	15.69	5,907.96	-146.56	-2.48%

Q2 Earnings

For Q2, 99% of S&P 500 companies have reported earnings, 81% companies have reported a positive EPS surprise and 81% of S&P 500 companies have reported a positive revenue surprise.

Earnings Growth: The earnings growth rate for the S&P 500 is 11.9%. This mark the 3rd consecutive quarter of double-digit earnings growth.

Valuation: The forward 12-month P/E ratio for the S&P 500 is 22.1. This P/E ratio is above the 5-year average of 19.9 and above the 10-year average of 18.5.

Economy News

• Interest Rate: 4.5%. 
• GDP Annual GDP: 3.3% 
• CPI/Inflation: 2.7% 
• Producer Price Index (PPI): 3.3%
• NonFarm Payroll: 22,000 vs. 75,000 expected. Unemployment: 4.3% 
• PCE: 2.6% 
• ISM Manufacturing: 48.7 
• ISM Services: 53 
• ADP Report: 54,000 jobs vs. 75K expected
• Consumer Confidence Index: 58.2 down significantly
• Mortgage Rate: 6.48% for 30-year Fixed.

Current Market Phenomenon

• Economy: Tech and AI related (Industrials, Utilities) are doing well earnings were fantastic but rest were hit and miss. The labor market is getting deteriorated but probably far from recession territory.
• Inflation: Still in control though it has started ticking up in last few months, mostly because of tariff and/or tariff fear
• Interest Rates → Fed rate Cuts expected on September 17. Future cuts depends on the Inflation numbers and labor market
• Stock Market → Doing well but near-term volatility as we have entered to worst month of stock market
• Tariffs → Tariff scare is subsiding gradually but this is an unknown territory for the market

What can we expect going forward - The September effect

• September has been the WORST month for the stock market since the inception of the stock market.
• Over the past 25 years, for the S&P 500, the average monthly return for September is about -0.4%, -1% in last 20 Yrs and -2.5% in last 10 years. 

But the question is why does it happen in September?

• Seasonal Volatility: Reduced trading volume post-summer leads to sharper price swings because many Institutional investors go on vacation
• Investors return from summer vacation in September ready to lock in gains as well as tax losses before the end of the year
• Individual investors liquidate stocks going into September to offset schooling costs for children
• Typically September to September and some part of October are lethargic month for stock market  with no major catalyst till later part of October.

Let’s see NASDAQ Return in last 10 Years (Sept 2015 – Sept 2024):  -2.5%

•  2024: +2.68%

•  2023: -5.81%

•  2022: -10.44%

•  2021: -5.31%

•  2020: -5.41%

•  2019: +0.46%

•  2018: +0.05%

•  2017: +0.15%

•  2016: +1.86%

•  2015: -3.27%

• What it means is that volatility has increased significantly in last 10 years.  
• My final thoughts: Historically, the month of September has not been very kind to the stock market and investors in general. If the inflation keeps ticking up then market may become very volatile till tech earnings comes out in October. Having said that, we never know it could be positive like last year because of FED rate cut hopes? That’s very much possible, but after cut what  FED says about future is KEY. If so, then it would be a bonus! But frankly, I will be cautious. As far as October is concerned, most of the historical major crashes happened in October. But more on my next blog..

My Strategy in current market environment

The strategy does not keep changing always. Rather, we should re-strategize our portfolio position depending on the market situation. In other words, we need to fine tune our strategy based on the market situation. Adapting to the change based on the market situation is the KEY. Here are some strategies that I would like to emphasize/re-emphasize.

• Always HOLD some CASH to leverage market pullback. For me this is always a priority. 
• As we march toward September, let’s not forget above point# 1. 
• 98% of of WS expects FED to cut 0.25 interest rate on Sept 17, but the future economic data may change the whole scenario
• IF FED cuts rate: Real Estate, Consumer discretionary, Technology, Utility, Financials and Small Cap stocks tends to perform well 
• When there is a dip - not to jump in and buy on both hands. It should be gradual accumulation
• Any stock we buy now, the time horizon should be to hold at least for a few months and trim on the rally
• Watch the market trend and Invest accordingly. Put money on what’s working, not what’s cheap and keep losing…
• Have patience and thoughtful execution, not to be thrilled or too depressed, Greed and Fear drives the market. Retail investors get panicked and sell or get out of the market mostly on WRONG time
• Have some mitigation strategy: taking constant profits, hedging the portfolio even if we lose some money
• Think long term but current market provide some short term trading opportunity in momentum stocks - “Tactical trading”. But be careful as we go to the worst month of September. 
• Always have a conscious buy list on you comfort level: Decide fast and act fast - market may not wait to long thinkers..
• If we accumulate then have clarity on why I am accumulating and how much should I accumulate and when to EXIT
• Avoid hanging with losers, same money can be better utilized with good stock that may turnaround fast and better ROI. 
• The most difficult thing is to have patience to keep accumulating when a good stock is down but takes time to recover. If recovery is not on the horizon, avoid it or accumulate very slowly.
• Be aware to avoid catching falling knife..Cheap become cheaper and then worthless sometime.

Stock Market TOP sectors for 2025

Sector	YTD Performance in %age
Communication Services (TOP)	23.15
Industrials	14.10
Information Technology	13.78
Materials	9.86
Utilities	9.55
HealthCare (only sector -ve)	-0.7

You can click below link to view complete sectorial performances:

Source: https://www.barchart.com/stocks/sectors/rankings?timeFrame=Ytd

Now let me discuss this month’s hedging pick for my Blog Portfolio.

Nebius Group N.V. (NBIS) is a technology company focused on AI infrastructure and engaged in building full-stack infrastructure to service the global AI industry. The company provides cloud platforms, computing capabilities, and generative AI solutions. Its services include Nebius AI (cloud platform for AI deployment), Toloka AI (data annotation and model training), Avride (autonomous driving for ride-hailing and logistics. It has operations in Europe, North America, and Israel. Formerly known as Yandex, it rebranded in August 2024 after divesting Russian assets due to geopolitical sanctions. The company is headquartered in Amsterdam, Netherlands.

Why do I like NBIS?

NBIS is a high-growth AI infrastructure stock, driven by surging demand for GPU clusters and cloud services. It provides full-stack AI infrastructure, including large-scale GPU clusters, cloud platforms, and developer tools. It operates Nebius AI, a cloud platform for intensive AI workloads. Its financial resilience (low debt, substantial liquidity), Nvidia partnership, and analyst optimism position it as a compelling growth stock. Based on the information the company has also strategic investment from Jeff Bezos and Shopify’s CTO. The company is seeing spectacular growth due to current AI phenomenon. The latest earnings shows over 600% revenue growth year over year and quarter over quarter. It’s very rare to see such humongous growth in any industry.  NBIS is scaling data center capacity to 100 MW by 2025, with potential for 300 MW, and securing 1 GW of power by 2026. A few months ago, I was unaware about this company but when the stock bumped up I was excited to see whether it’s a sensible movement or just a hype. That’s when I was excited about this stock. Let’s see the financials to make my point. 

Financials and other Key Info

The company released its latest earnings (Q4) on February 20, 2025. 

• Reported a revenue of $117.5 million or 625% year-over-year growth and quarterly revenue growth of 322%, primarily driven by the core AI infrastructure business. 
• Reported EPS of -$0.38 vs. -$0.50 expected beating expectations.
• The company also provided Annual Recurring Revenue (ARR) guidance of $900M-$1.1B for 2025, much higher than earlier guidance of $500M-$700M.
• The company has a cash of $1.68 billion and Market Cap of $15.63 billion which gives it huge opportunity to grow.

The CEO said that the company is expecting to have additional data center capacity and Blackwell GPUs coming on-stream later this year. And the ARR guidance is an indication of company’s anticipated exponential growth. The way AI and Data Centers are growing it’s very much feasible to achieve its targeted goal. The company has partnership of some of the great companies like Nvidia for Blackwell GPU, Meta to train its Llama language, Bosch, SAP, Saturn cloud etc.

Strategy

The stock is currently trading at $64.30. The 52-week high for this stock is $75.96, down about  -15% from its high. The stock has gone up significantly from $14.09 to $75.96 in last one year. So, the stock is obviously not cheap based on the Price to Sales ratio of 62. Despite the higher valuations and Risks (pls see below), it’s one of the best growth stock in the market visualizing the current AI phenomena. I have been slowly accumulating this stock in last few weeks. I will keep accumulating strategically to my current position or keep trimming as the situation demands. As most of my blog readers know, I am  a growth investor and usually I never buy any stock at once. I always buy in small quantities in a phased manner. I use such opportunity to accumulate and build my portfolio. When the stock goes up, it’s extremely important for me to take some chips out of the table and book some profits. That’s part of my strategy. Also, NBIS is a growth and volatile stock, hence some hedging is important to mitigate/protect from any significant downside. The company’s next quarter result is expected on 10/30, so one can wait to get more clarity. But I may slowly keep accumulating if the stock pulls back further.

Risks

As I said above, obviously it’s not a cheap stock as it’s trading at a valuation of 62 P/S ratio. Also,  there are other challenges like high capital expenditure, competition and cash burn. And as we all know that no company’s stock gets sparred when market goes down. Furthermore, the company is growing its business in U.S but primarily it’s a Netherland based company. So, we may not see the same valuation and institutional holding like a U.S company. This stock is advisable only for the growth investors who can absorb volatility and do not panic. Otherwise, better to stay away.

My final thoughts

As we are all aware, we are in the AI age and as I have said many times in my updates, we are in two economies AI economy which is doing fabulous and other part of the economy is lackluster. NBIS is part of the AI economy and reaping the benefits of exceptional AI/data center growth. It’s also an expensive stock by any measure. But let’s not forget that it’s expensive not because of hype, rather it’s having phenomenal revenue growth and Wall Street loves that. Also, in my observation, the stock is not terribly volatile. Having said that, if I see any red flag on any of my holding, then I won’t hesitate to pull the trigger irrespective of how great the company/stock may be. I do NOT fall in love with any stock. So, emotions should not impact my investment decision. At this time, I feel NBIS has a huge potential as long as AI growth continue, hence I am invested.

Key Q2 Earnings Update

Broadcom (AVGO): Beat on Top and Bottom line and better guidance. 

•  EPS: $1.69 adjusted vs. $1.65 expected. Net Income: $4.14B vs. loss last year.

•  Revenue: $15.96 billion vs. $15.83 billion, up 22% YoY.

•  Guidance: $17.4 billion vs. $17.02 billion.

My View: The company raised its quarterly dividend by 11.3% to $0.59 per share and declared $10B share buyback. AI demand was huge, up 63%. Also, it added another big customer expected to bring $10B in revenue. The CEO promised big next year! AVGO is a great growth stock. Shares were up $17, 5.6% in the overnight trading. 

Salesforce (CRM): The company barely beat earnings and guidance was below expectations. This has been one of the laggard stock in the S&P 500 and visualizing current earnings and forecast, I am apprehensive that it will have good run in the foreseeable future. I will stay away from CRM at this time.

Other two earnings that I liked was Snowflake (SNOW) and Mongo DB (MDB). They came with solid results and forecast.

A few Equity/Stocks to watch

• AVGO
• ALAB
• RDDT
• META
• MSFT
• NVDA
• TSLA
• GOOG
• AMZN
• CRWV
• CVNA
• APLD
• HIMS
• RH
• SOXL
• TQQQ
• RXRX
• RKT
• ENVX
• SNOW
• OPEN

Shesa’s Blog Portfolio (As of SEPT 7, 2025)

Equity	Suggested Price	Current Price	Suggested Date	% Change	My View  (see disclaimer)
STOCK (All prices are in USD)
AAPL	12.9	239.69	1/25/13	1758%	HOLD
META	47	752.45	11/13/13	1501%	Accumulate on dip
MA	77.18	584.22	12/12/13	657%	HOLD
AMZN	15.58	232.33	4/12/14	1391%	Accumulate on dip
SHOP	13.48	146.82	11/25/18	989%	HOLD
SPG	54.59	182.25	5/25/20	234%	HOLD
NVDA	23.9	167.02	2/13/22	599%	Accumulate on dip
TSLA	290.25	350.84	5/1/22	21%	Accumulate on dip
RKT	14.24	20.26	7/6/25	42%	Accumulate on dip
SOXL	15.66	26.45	4/6/23	69%	Accumulate on dip
GOOG	123.25	235.17	5/21/23	91%	Accumulate on dip
PLTR	20.49	153.11	11/19/23	647%	Accumulate on dip
PANW	142.06	194.46	3/31/24	37%	HOLD
ENVX	10.48	9.19	4/28/24	-12%	Accumulate on dip
Z	51.92	87.89	8/11/24	69%	HOLD
LRCX	76.16	102.95	11/11/24	35%	HOLD
RXRX	6.76	4.61	1/2/25	-32%	HOLD
IONQ	37.46	41.8	2/18/25	12%	HOLD
AVGO	203.64	334.89	4/5/25	64%	Accumulate on dip
APLD	11.18	13.89	6/15/25	24%	Accumulate
HOOD	94.4	101.25	7/6/25	7%	Accumulate
CRWV	104.14	89.09	8/3/25	-14%	Accumulate slowly
NBIS	65.47	65.47	9/7/25	0%	NEW ADDITION
	ETF
IHF	27.82	40.81	8/16/15	47%	HOLD - I may Sell
MUTUAL FUND
PRMTX	59.45	165.92	12/20/14	179%	HOLD
FSRPX	9.05	19.32	1/15/16	113%	HOLD

Other news

• Apple (AAPL) will be conducting its iPhone centric event on Tuesday, 9/9 @0am PST.
• Tesla (TSLA) proposed a new compensation plan for CEO Elon Musk, potentially worth up to $1 trillion based on certain milestone achievements.
• Robinhood (HOOD) was added to the S&P 500 last Friday. I anticipate the stock to go up on Monday.

Economic report this week

We will see two very critical economic numbers this week. 

• WED, 9/10: Producer price index (PPI) 
• THU, 9/11: Consumer price index or Inflation(CPI)  => Extremely important.
• FRI, 9/12: Consumer sentiment (prelim)

Equity Sold since my Last Blog

None

Here is my YouTube channel link:  https://www.youtube.com/channel/UCt7oLVUMG3NkJUzAVUzl4Tg

Disclaimer: This blog is meant to provide my opinion only. The information provided is to the best of my knowledge but may not be accurate. I do NOT provide any professional recommendation to buy/sell any stock, ETF, mutual fund, or any other security(s). As an investor, it’s your hard-earned money and you decide what is best for you. The above are merely my own opinions on what I do. Please contact a professional money manager to buy/sell any security. I do not charge any fees or commission by writing the blog except anything from Google AdSense. I have position(s) on whatever security I put on my blog portfolio and avoid including any security that I do not own or follow. Anyone buying or selling the equities mentioned here must do at their own risk.

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