The artificial intelligence boom has propelled cybersecurity leaders CrowdStrike, Palo Alto Networks, Zscaler and Gen Digital onto this list of 24 top-rated stocks to watch. AI trends have also boosted Dropbox and MongoDB onto launchpads of their own.
Buoyed by AI with MongoDB Atlas and Dropbox Dash, MDB and DBX remain poised to pop as they enter new buy zones. MongoDB was featured as the IBD Stock Of The Day on Nov. 17.
Earlier this year, India-based MakeMyTrip planted its flag in the AI field, partnering with Microsoft to reshape the travel booking landscape with generative AI.
PANW stock, CRWD, ZS and GEN have already blasted beyond their buy zones.
All the names on this stock screen hail from today's Top 20 industry groups — a factor worth noting since winning stocks tend to come from the top-ranked groups from the 197 industries IBD tracks.
Each company is also outpacing at least 95% of all stocks in terms of key stock-picking factors.
Education Stocks, Fashion Plays Also In Demand
Trendsetters like Lululemon Athletica, Deckers Outdoor, Ross Stores and Skechers have also fashioned a spot on this screen. LULU stock, Deckers and SKX are now extended beyond their latest buy zones.
Education stocks New Oriental Education and Stride have both learned how to impress Wall Street with strong breakouts and are now extended.
CRWD, PANW Stock Lead Top Stocks In Industries
| Company | Symbol | Comp Rating | EPS Rating | RS Rating | SMR Rating | A/D Rating |
|---|---|---|---|---|---|---|
| CrowdStrike | CRWD | 99 | 99 | 98 | A | A |
| Deckers Outdoor | DECK | 99 | 99 | 96 | A | A- |
| Intuit | INTU | 99 | 98 | 92 | A | B- |
| Stride | LRN | 99 | 99 | 96 | B | A |
| Lululemon Athletica | LULU | 99 | 98 | 94 | A | B+ |
| MongoDB | MDB | 99 | 83 | 95 | B | B |
| MakeMyTrip | MMYT | 99 | 81 | 96 | B | A- |
| Palo Alto Networks | PANW | 99 | 98 | 95 | A | B+ |
| Skechers | SKX | 99 | 93 | 92 | B | B |
| Zscaler | ZS | 99 | 99 | 97 | A | A |
| Dropbox | DBX | 98 | 98 | 87 | A | B+ |
| New Oriental Education | EDU | 98 | 82 | 97 | B | B- |
| Gen Digital | GEN | 98 | 85 | 86 | A | A |
| Ross Stores | ROST | 98 | 86 | 85 | A | B |
| Wintrust Financial | WTFC | 98 | 93 | 87 | A | A- |
| First Commonwealth Finl | FCF | 97 | 86 | 80 | A | B+ |
| Trex | TREX | 97 | 90 | 95 | B | A- |
| Armstrong World Industries | AWI | 96 | 83 | 93 | A | A+ |
| Core & Main | CNM | 96 | 84 | 97 | B | A- |
| Griffon | GFF | 96 | 92 | 97 | B | A |
| Owens Corning | OC | 96 | 94 | 92 | B | A |
| PGT Innovations | PGTI | 96 | 86 | 97 | B | A- |
| Tecnoglass | TGLS | 96 | 93 | 86 | A | B+ |
| East West Bancorp | EWBC | 95 | 87 | 90 | A | B+ |
Data as of Dec. 19, 2023
CRWD, PANW Stock Among Top-Rated AI Plays
To make this screen of top stocks to watch in the top-ranked industries, each company must meet the following criteria:
- Industry group rank: from 1 to 20 (on IBD's 197 industries list).
- Composite Rating: 95 or higher.
- EPS Rating: 80 or higher.
- Relative Strength Rating: 80 or higher.
- SMR Rating: A or B.
- Accumulation/Distribution Rating: A or B.
- Current share price: $12 or more.
- 50-day average volume: 400,000 shares or more.
Ratings, of course, are just one part of the equation when evaluating a stock. Be sure to always check the stock chart to gauge when to buy, sell or hold.
Scan the list below and click the symbols to check the stock chart for any bases and buy zones.
Build Your Watchlist With Stock Ratings And Stock Lists
Running stock screens with the IBD Stock Screener or MarketSmith is an effective way to streamline your research to find top-rated stocks to watch like Microsoft.
You can also zero in on the best stocks to watch using IBD stocks lists based on a wide range of preset filters. You'll find top-rated stocks meeting the criteria of the IBD 50, IBD Sector Leaders, IBD Big Cap 20, IPO Leaders and more.
Meta Platforms stock and Tesla, for example, earn a spot on the IBD Big Cap 20.
Once you've put together potential stock picks for your watchlist, you'll want to evaluate your ideas with IBD Stock Checkup. With pass, neutral or fail ratings for each of your stocks, IBD Stock Checkup provides a detailed look at both the fundamental and technical health of the companies on your watchlist.
Additionally, based on the CAN SLIM system, the Composite Rating provides an overall score that takes into account each of the IBD ratings. The single score considers how a company and its stock are performing in terms of annual and quarterly earnings growth as well as its relative strength vs. the rest of the market. The score also accounts for sales, profit margins and institutional demand.
But note that you should not buy a stock solely on its ratings or placement on one of IBD's stock lists. No matter how compelling a company's story may seem, savvy investors will always check the technical action in the stock chart before buying.
Check The Chart To Know When To Buy MSFT Stock And Others
Using stock lists helps you zero in on the best stocks to watch. Stock ratings look under the hood to diagnose a company and its stock's fundamental and technical health. Both stock lists and stock ratings help you understand what to buy. But to fully understand when to buy stocks, take a look at the stock chart.
It's also critical to understand what type of environment you're currently in. Is it a bull market, when most stocks go up? Or a bear market, when most stocks go down? Or is it a volatile, choppy and uncertain time when the market indexes tend to fail to make any sustained headway?
Use stock charts to evaluate both the market indexes and individual stocks. Charts will help you pinpoint the best time to buy stocks by identifying support and resistance, as well as buy points and buy zones. Using charts also helps you identify warning signs and when to sell stocks.
So when searching for potential stock picks and stocks to watch, always check the charts. They provide the most unbiased diagnosis of a stock's health.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
