Hot or Not, Stock Market Edition: 10/03/2025

Happy Friday! Here are a few choice hot (and not) stocks to check out before the weekend: 

• Hot: International Business Machines Corp (IBM) goes all in with AI; Nvidia (NVDA) continues to dominate
• Not: McDonald’s Corp. (MCD) falls while the S&P soars; Novo Nordisk (NVO) suffers amid tariff fears

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🔥 HOT: Looks like a legacy hardware and consulting firm is going big on AI. Just this week, International Business Machines Corp (IBM) and AWS announced a strategic push to grow their cloud presence across the Middle East, while separate collaborations with Zyphra and Datavault AI have IBM investing millions and expediting product launches. The fundamentals support the headlines: IBM currently sports a B (Buy) Zen Rating, with solid Component Grades to boot. The stock ranks in the top 8% of stocks we track for Safety and the top 11% of stocks we track for Growth, indicating an excellent mix of security and price-action potential. Currently ranked #8 out of 57 stocks in the B-rated Information Technology Service industry, our quant ratings system suggests IBM’s pivot to AI and cloud looks real.

🥶 NOT: While the S&P is hitting new highs, fast-food juggernaut McDonald’s Corp. (MCD) is slumping. The stock’s down about 5% in the past month, and even a big promotional comeback for its famed Monopoly game with clever brand collaborations hasn’t lit a fire under the stock. This is evidenced by the stock’s recent downgrade to C in our Zen Rating, where it languishes in the middle 50% of stocks we track, indicating thousands of stronger stocks to choose from. It has middling C ratings for the majority of its Component Grades, including value and growth. While MCD remains a solid company, there’s really no catalyst strong enough to reignite sustained interest here. Look elsewhere for real growth.

🔥 HOT: People keep saying Nvidia’s (NVDA) big move is over … Yet it keeps making big moves. As for its 5% pop in the past week? Two key things: A) A blockbuster $5 billion investment in Intel B) Reports of booming demand for its AI chips driven by OpenAI and cloud giants. The stock was recently upgraded from a C (Hold) to a B (Buy) in our Zen Ratings system, indicating now could be a favorable entry point. Digging deeper into the fundamentals via the stock’s Component Grades, you’ll find an impressive Financials rating of A buoyed by strong Bs in Momentum, Sentiment, and from our proprietary AI factor, which sifts through mountains of data to detect subtle patterns that could lead to superior stock growth (learn more about how it works here). While NVDA does have one mark on its permanent record via a D grade for Safety, there’s enough momentum and demand to make it watchlist-worthy for investors who can stomach a little risk. (P.S. Fun fact: NVDA is ranked #15 out of the 70 stocks in its industry. Here’s the #1 ranked stock in the industry.)

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🥶 NOT: Novo Nordisk (NVO) lost its luster? While NVO has been the darling of the biotech runway thanks to its blockbuster weight-loss drug Wegovy, it just got a downgrade in our Zen Ratings system to C (Hold) that’s worth digging into. Recent negative catalysts abound — Morgan Stanley just downgraded NVO, and fears about tariff impact on Wegovy sales have investors rattled. Digging into the Component Grades for more clues, you’ll see a standout A rating for Value — but don’t be so dazzled that you miss the myriad red flags in other areas like Growth, Momentum, Safety, and Sentiment, where it earns middling Cs — or the fact that the Biotechs currently earn a F Industry Grade in our system. Ultimately, while NVO does still have some appeal, a watch and wait approach might be prudent right now. 

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