Why This Growth Stock Is a Must-Buy Before the Fed Cuts Rates in 2025

Markets are frothing for rate cuts—and this stock’s about to ride the liquidity wave.

The Fed’s Pivot Playbook

When Jerome Powell flips the switch to easing, high-growth names will explode. This one’s coiled like a spring.

Crypto Adjacent? Even Better

With Bitcoin ETFs sucking up institutional capital, equities with blockchain tailwinds could see turbocharged inflows. (Yes, even your boomer portfolio manager is finally getting the memo.)

The Ironic Truth About ‘Safe’ Assets

Bonds? Please. After a decade of financial repression, the real risk is *missing* the next 10x move. But hey—enjoy that 3% yield while inflation eats your face.

Position before the printers fire up. The smart money already is.

Cognex has a big future

It's no secret that the increasing adoption of technologies like automation and machine vision is the key to modern manufacturing, particularly in reshoring it from countries with lower labor costs. In addition, machine vision's ability to perform repetitive tasks in assembly lines and logistics -- guiding, monitoring, inspecting, and controlling processes more effectively than the human eye -- is a significant plus.

Also, consider the potential of DEEP learning through artificial intelligence (AI). For example, Cognex's software can learn from "right " and "wrong" examples given to it, enabling the hardware to identify anomalies in production. As such, Cognex is also a way to play the AI evolution, as it will significantly enhance the value-add of its solutions.

Cognex and interest rates

All of the above is an example of secular growth. However, like almost all companies, Cognex also relies on cyclical growth. Furthermore, its exposure to capital spending in interest-rate-sensitive areas, like automotives (notably electric vehicle batteries) and consumer electronics (has been a significant customer in the past), leaves it exposed to the ups and downs of the economy.

When the economy is booming, auto and electronics companies are willing to make expansionary capital spending decisions, and when it's weak, cutting capital spending is often the first thing companies look to do.

Image source: Getty Images.

Unfortunately, the relatively high interest rates have hit Cognex's overall growth prospects, even as it grows its AI solutions by embedding more AI/deep learning into its solutions. If and when interest rates do MOVE lower, there's likely to be some spending due from automakers and electronics companies as end demand at least stabilizes, and they need to invest in new product development. That will benefit Cognex. All told, the combination of secular and cyclical growth makes Cognex an excellent stock to buy ahead of a rate cut.