Broadcom and Uber Technologies rank among this week's top five stocks to watch near buy points. JPMorgan Chase, Delta Air Lines and Ryan Specialty also make the cut. Delta stock broke out on Monday while Broadcom stock topped a handle entry.
Among these, Ryan Stock belongs to the IBD 50 list of top growth stocks. Broadcom is in the IBD Big Cap 20. Other top IBD lists for the best stock ideas include Leaderboard and Long Term Leaders, as well as SwingTrader.
The relative strength line for Broadcom stock is hitting highs as it clears a buy point, an especially bullish sign. That is signified by the blue dot at the end of the RS line on the weekly MarketSurge chart. The RS lines for the other four top stocks to watch are either improving or not far from highs. A rising RS line, the blue line in the charts shown, shows a stock's outperformance vs. the S&P 500 index.
In addition, all five stocks have big, volatility-inducing news out of the way. Even better, the stock market uptrend means the door is open to new purchases. The S&P 500 rose to a fresh record Monday with corporate earning seasons ramping up.
AI Stock Broadcom
Shares extended their rally above the 10-week moving average last week, after finding support at the 40-week line in September. The AI chip stock rose a fraction on Monday, enough to clear a 180.25 handle buy point from a 16-week consolidation.
The RS line for Broadcom has risen steadily over the past 10 years, according to the MarketSurge chart. That is a sign of long-term outperformance.
The AI stock earns a perfect IBD Composite Rating of 99 and a superior EPS Rating of 93.
For its latest fiscal third quarter, the fabless chipmaker posted nearly 18% earnings growth. That was the best in six quarters and accelerated sharply from a 6% gain in the prior quarter. Sales growth has quickened for two straight quarters, capped with a 47% Q3 gain.
Analysts expect 14.5% earnings growth for the full year and a further 28% jump next year, according to FactSet. Broadcom's fiscal year ends in October.
Broadcom offers a way to play the important artificial intelligence theme. On Friday, analysts at Bank of America named Broadcom stock a "top pick" after meeting with the company's management. They said that networking demand is "increasing rapidly with solid next 12-month visibility." They especially favor this AI stock because of its "compelling combination of silicon, recurring software and cash returns." The California-based company is chasing Nvidia's AI success.
The "top pick" rating came after Broadcom announced new AI products.
A 93 RS Rating means that Broadcom has outpaced 93% of all stocks in IBD's database over the past year. It's up 63.3% so far this year despite consolidating since a big earnings surge in June.
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Uber Stock
Shares bounced strongly off the 10-week moving average last week, hitting a 52-week high. Uber stock gapped up more than 10% on Friday. Friday's intraday low roughly coincides with the top of the base at 82.14, making that a legitimate entry. Shares lost 1.6% on Monday, putting them back in buy range.
The RS line is trending higher but still below the consolidation peak.
Uber stock owns an IBD Composite Rating of 84, EPS Rating of 34 and RS Rating of 92. The company smashed earnings estimates in the second quarter as revenue growth sharpened to 16%. Analysts expect the increasingly profitable ride-sharing app to deliver a 24% EPS gain for the full year, with earnings growth more than doubling next year.
Significantly, a disappointing Tesla Robotaxi unveiling event on Thursday removes a six-month overhang on Uber, some analysts said. Uber stock has soared 38% so far this year.
Its next earnings report is expected on Oct. 31.
JPMorgan Chase Stock
Shares bounded 4% above the 10-week line last week, nearly all of that on Friday, as JPMorgan kicked off bank earnings. Shares edged lower on Monday, now about 2% below a 225.48 flat-base buy point. JPM stock is actionable from a decisive clearing of the 50-day/10-week lines last Friday.
It has surged to record levels in 2024 on the back of a series of breakouts.
The money-center bank holds an IBD Composite Rating of 87, EPS Rating of 73 and RS Rating of 85. On Friday, Chase beat Q3 views.
So far in 2024, Chase stock has soared 30.3%, riding the 10-week line to highs and never once dipping below the 200-day line.
Delta Air Lines Stock
Shares rose 4.2% last week despite weak earnings and guidance. Delta stock rallied 3.6% on Monday to top a 52.45 cup-with-handle buy point.
The RS line is improving after a sharp plunge over the summer. The peak travel season saw airlines facing pressure on fares due to a glut of flights. But the oversupply is improving, Delta said during its earnings report on Thursday.
Delta stock holds an IBD Composite Rating of 52, EPS Rating of 17 and RS Rating of 87.
The low EPS score reflects recent Delta earnings declines, including a 26% slump in the latest quarter. Analysts expect a 2% earnings drop for the full year and a 19% rebound next year on rising sales.
In the bigger picture, the entire travel sector is rebounding aggressively, including cruise lines such as Royal Caribbean (an IBD 50 top growth stock), travel booking sites and hotels.
So far in 2024, Delta stock has surged more than 32% though it still remains below pre-pandemic highs.
Ryan Stock
Shares edged down 0.65% last week after notching a 52-week high on Oct. 7. Ryan Stock gained 1% on Monday, near the top of a buy zone from a recent breakout past a 69.03 cup-base entry. It seized that entry on Oct. 1 after finding support at the 10-week line. The RS line is trending higher but still remains below the highs of the cup base, a not-so-great sign.
Ryan Specialty holds a best-possible Composite Rating of 99, as well as an EPS Rating of 98 and RS Rating of 93.
A leading excess and surplus (E&S) insurance company, RYAN boasts robust growth. Earnings growth ranged from 28% to nearly 35% the last four quarters in a row. Sales growth reached between 19% and 23% over this same period. However, growth decelerated on both the top and bottom lines in Q2.
For the full year, analysts expect a 30.5% leap in earnings per share, slowing to a 22.8% gain in 2025.
Analysts expect insurance earnings, at large, to feel an impact from the recent hurricanes along the Southeast coast. However, Chicago-based Ryan's exposure to the storms is unclear.
Insurance stocks overall had an OK week despite some ups and downs.
Year to date, Ryan Stock has surged 68.5%. That includes a 7.5% earnings breakaway gap on Feb. 28 and a nearly 10% earnings surge to record highs on Aug. 2.
Ryan Specialty is expected to next report on Oct. 31.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
