We continue to see and hear about many uncertainties, not the least of which is the continued back-and-forth in the Middle East. Despite that, stocks have continued to handle themselves very well. Our top trade is Twilio Inc. (TWLO), which has solid growth and free cash flow. The stock also just emerged from a huge base after earnings, explains Mike Cintolo, editor of Cabot Top Ten Trader.
Twilio offers an AI-powered, cloud-based customer engagement platform that provides APIs (Application Programming Interfaces), which allow developers to embed various functions — like text (SMS/WhatsApp), voice, email, chat, and video — directly into their apps. The company’s increasing focus on AI is paying off as its voice and automation tools are seeing “unprecedented demand,” particularly for customer service use cases.
This was highlighted in Q1 results for Twilio, which revealed that revenue grew at its fastest pace in years. In what management described as a “milestone” quarter, total sales rose 20% from a year ago (up 16% on an organic basis) to $1.4 billion. Earnings of $1.50 per share beat estimates by 23 cents.
TWLO broke out in late 2024 and had a huge 14-week run. But the top in early 2025 stood for the next 15 months, with the $135-to-$145 area providing repeated resistance to advances after the stock was cut off at the knees during the tariff panic.
However, when stocks turned up last month, TWLO quickly moved above that resistance. Then the earnings reaction was a stunning one, with a massive-volume gap to new highs. A pullback is possible, but we like the power here out of a big consolidation. We’re okay entering here or on a mini-shakeout – and using a looser stop.
Recommended Action: Buy TWLO.
