3 Sectors With Intriguing Risk-Reward Profiles
By Patrick Martin, Managing Editor
Before the start of the third quarter, 10 of our Top Stock Picks of 2025 had delivered double-digit gains. As of Friday morning, nine of our Schaeffer’s products boast multi-month gains of 400% or more. Staring down the second half of 2025, it’s safe to say we’re on a heater. And better yet, it’s our birthday, as Schaeffer's Investment Research turns 44 this month. We want to thank our loyal subscribers and readers for joining us on this journey within the options industry. To show our gratitude, we released a free report on our Top Stock Picks to buy (and hold) for the remainder of 2025.
Below are snippets of our favorite picks from the report, plus some editorializing on their sectors which have had some intriguing headlines in recent weeks.
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Nuclear Energy, NuScale Power (SMR)
NuScale Power (SMR) gets its ticker name for the small module reactors that the company specializes in. The stock is a relative strength (RS) leader on 20- , 40-, and 60-day readings. The shares are up 112% in 2025 and 230% over the past 12 months, yet currently 19.9% of the stock’s float is sold short, with short interest at all-time high levels. There could be room for upgrades too, should the broader analyst pessimism begin to unwind. More than 50% of covering brokerage firms sport a “hold” or “strong sell” rating.
Beyond the contrarian intention in nabbing a red-hot stock that could still move higher, there are macro tailwinds blowing. Nuclear energy stocks got a boost in May when President Donald Trump signed four executive orders intending to double U.S. nuclear power by 2050. The European Commission’s $2 trillion budget proposal for 2028-2034 reportedly features nuclear energy funding, which is receiving split support and resistance among members.
Cryptocurrency, Galaxy Digital (GLXY)
Cryptocurrency asset manager stock Galaxy Digital (GLXY) is forming a cup-and-handle pattern on its weekly chart. If Bitcoin (BTC) can remain above $100,000, we could see bullish momentum for the sector to end 2025. BTC holdings continue to increase through exchange traded funds (ETFs), which is slowing volatility to the downside amid a continual bid to gather the limited supply asset.
A staunchly pro-crypto Trump Administration is another long- term plus. With GLXY now trading on U.S. exchanges, inflows could provide tailwinds. A healthy 7.4% of the stock’s total available float is sold short, meaning there is plenty of covering potential to be had. In terms of options, there’s a buildup of put sellers at the September 17.50 strike that could act as a floor. There are also large call positions being taken at the September 32.50 and December 30 strikes, as well as the January 2026 35-strike call -- all targeting a second- half rally to 2021 highs.
Since that writeup above, GLXY has added 25%, while BTC conquered $120,000 and now has support at $115,000. ‘Crypto Week,’ was a resounding success, with President Trump helping Congress pass the first major cryptocurrency regulation in the U.S. Stablecoins – a type of cryptocurrency with value tied to the U.S. dollar -- were mentioned in four earnings calls this week, all big banks. The more stablecoins bring cryptocurrencies legitimacy, the more companies like Galaxy Digital stand to benefit.
Liquified Natural Gas, Venture Global (VG)
Global liquified natural gas (LNG) demand is rising sharply, especially in Europe, as Russian pipeline dependence is cut. The Internation Energy Agency (IEA) forecasts global LNG demand to grow 25% to 30% by 2030. Global natural gas and energy futures remain strong, especially in winter strip contracts (Q4 2025-Q1 2026). There has also been increased government and private funding toward secure LNG infrastructure. With the above in mind, Venture Global (VG) is positioning itself as a top three U.S. LNG exporter. VG has as much as 20% to 40% medium- to longer- term technical upside, which would push it between $22 and $25.
Concessions are being made globally to adjust to the Russian overhang and the impact tariffs could continue to have on commodities. JERA, Japan’s largest power generator, inked new 20-year contracts in June to purchase up to 5.5 million metric tons of U.S. gas annually starting around 2030. A massive $44 billion Alaska LNG project is being discussed with South Korea. This week, Venture Global signed a 20-year deal with Italy’s Eni to supply LNG. The fine print and follow through on these deals will always be scrutinized, but publicity can be traded.
Sector health alone cannot prop up a stock if the technicals and fundamentals are not there. Just ask Marvell Technology (MRVL), which cannot get out of its own way despite rubbing elbows with artificial intelligence (AI) firebrands. But when risk-tolerant stocks like SMR, GLXY, and VG indicate technical strength, tailwinds blowing from their sector only reinforce their potential.