Wednesday's IBD 50 Stocks To Watch pick is artificial intelligence leader Clearwater Analytics, which is pulling back to a key level following sharp losses in recent weeks. That makes the AI stock one of the best ideas to buy and watch right now. Shares reversed from early losses to rally 0.9% Wednesday.
Boise, Idaho-based Clearwater develops software-as-a-service solutions for insurance companies, banks and other institutions. Two of its most popular platforms, Clearwater Prism and Clearwater Jump, are designed to deliver investment accounting, performance, compliance and risk reporting to clients.
On Nov. 6, Clearwater reported a 33% increase in earnings on a 22% sales jump, according to IBD MarketSurge. For the full year, Wall Street analysts expect the company's earnings to grow 34%, with an increase of 20% in 2025, according to MarketSurge.
"We continue to make meaningful investments in developing new products focused on both new logos and current clients," Chief Executive Sandeep Sahai said in the company's earnings release.
"Our single instance, multitenant platform gives us a strong competitive advantage in developing generative AI applications that are capable of delivering innovative solutions to clients while increasing our operational efficiency," Sahai continued. "By capitalizing on these opportunities and remaining agile, we're extending our long-term market differentiation and accelerating our journey towards building the world's leading investment management platform."
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AI Stock Pulls Back To Key Level
On Nov. 7, Clearwater stock soared nearly 15% after the company's better-than-expected results for the third quarter. But shares have pulled back to their 10-week line, which is a key level to monitor, following losses in recent weeks. A decisive rebound would place the AI stock in a new buy area. But sharp losses below that level would trigger a sell signal.
The stock's relative strength line jumped to new highs in early November, but has eased over the stock's ongoing pullback. That means the AI stock has been underperforming the S&P 500 since then. Look for that technical indicator to bounce back over the coming weeks to indicate market outperformance.
Amid powerful gains since late April, Clearwater stock shows a near-ideal 98 Composite Rating from Investor's Business Daily, according to IBD Stock Checkup. That makes the AI stock one of the best names to watch in today's stock market.
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Other Stocks To Keep An Eye On
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Atour Lifestyle | 29.15 | Consolidation | |
| GeneDx | 89.11 | Consolidation | |
| Taiwan Semiconductor | 212.60 | Consolidation |
Source: IBD Data as of Dec. 11
Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
