Thursday's IBD 50 Stocks To Watch pick is artificial intelligence play Comfort Systems, which is approaching an official buy point. The AI stock climbed 0.8% Thursday morning, within striking distance of the 352.45 entry.
Comfort Systems specializes in heating, ventilation, air conditioning, or HVAC products, as well as electrical services for commercial and industrial buildings. It is an umbrella for more than 40 companies, designing and installing these systems for new buildings and replacing outdated ones in older establishments.
In a recent investor presentation, the company said it sees future growth prospects in the expansion of data centers, electric-vehicle battery production, chipmaking, manufacturing and other industrial developments.
Expansion in data center construction over the next few years is predicted to be a huge growth driver. Data centers provide the computing power needed to train and deploy artificial intelligence models.
On July 25, Comfort Systems earned $3.74 per share on revenue of $1.81 billion, representing year-over-year growth of 94% and 40%, respectively. Bullishly, the company boasts four quarters of accelerating earnings growth.
The company's 2024 earnings are expected to jump 58%, according to IBD MarketSurge, with another rise of 14% in 2025.
Be sure to read how to adjust to changing market conditions, with IBD's new exposure levels.
AI Stock Eyes Buy Point
In recent weeks, the AI stock bullishly regained its 50-day moving average, moving up the right side of the consolidation. Shares closed Wednesday just 4% below a 352.45 buy point, according to MarketSurge chart analysis.
Keep in mind that the current formation is a later-stage base. Those are more prone to failure and have less upside potential than earlier-stage bases.
The stock's relative strength line is rebounding from its early July lows and is approaching a new high. Look for it to hit a new high on the breakout day. That would be a significantly bullish signal of stock market outperformance.
With outstanding price performance year to date, the AI stock boasts a best-possible 99 IBD Composite Rating, according to IBD Stock Checkup. Comfort Systems stock has rallied about 65% this year and is poised for more gains.
With market risk low, investors should be looking to incrementally raise their market exposure. And this AI stock is among the best ideas to consider.
Finally, Building-A/C & Heating Products industry group peer Carrier Global was a recent IBD Stock Of The Day. Shares are in buy range above a 70.09 flat-base entry.
Find The Best Stocks To Buy And Watch With IBD Stock Screener And IBD Screen Of The Day
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 |
|---|---|---|---|
| Deckers Outdoor | 1,106.89 | Cup base | |
| Netflix | 697.49 | Cup base | |
| Nvidia | 140.76 | Cup base |
Source: IBD Data as of Aug. 27
Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
