The S&P 500's winning stocks include names from varying industries. Here, we highlight five leading S&P 500 stocks to watch as the stock market sits at record highs. One reached an all-time high on Monday, while Magnificent Seven stocks Amazon.com and Microsoft also made the list.
S&P 500 Stock Microsoft Closing In On Buy Point
Microsoft came out of a flat base with a 430.82 buy point, according to MarketSurge pattern recognition. The stock sank below its 50-day moving average in mid-April but climbed back and is back near the buy point again.
The company topped fiscal third-quarter earnings and sales estimates on April 25. Microsoft's quarterly earnings grew 20% following three quarters of growth ranging from 21% to 27%. FactSet estimates show fiscal fourth-quarter profit growth slowing to 9% then 6%, then pick up to 12% and 13% in the following quarters.
Its third-quarter revenue increased 17% following 13% and 18% growth in the prior two periods. Microsoft's bright spot was its Azure cloud infrastructure business, whose sales increased 31% over last year's fiscal third quarter.
Microsoft forecast fiscal fourth-quarter sales of $63.5 billion to $64.5 billion, with the midpoint below the FactSet consensus of $64.3 billion. Microsoft expects its Azure growth to be around the same for the current quarter. FactSet estimates call for Microsoft's sales to rise 13% to 15% over the next four quarters.
Microsoft uses artificial intelligence in its Azure cloud computing platform, which is used to access, manage and develop applications and services through data centers. It also incorporates AI technology in its Copilot chatbot, Windows operating system, Xbox video gaming system, Microsoft 365 and Teams messaging app.
Its Accumulation/Distribution Rating is D+, partly due to gains in the past couple of weeks in mostly light volume.
S&P 500 Stock Amazon Climbs Back
Amazon pulled back from its record high reached on May 9, and sank below its 50-day line before retaking it on Thursday. It appears to be forming a new base.
Amazon stock rose to its new level after the e-commerce giant topped first-quarter earnings and sales estimates on April 30. The company delivered another quarter of robust profit growth, with a 216% increase over the prior year's period.
The company's Amazon Web Services cloud-computing division grew 17% year-over-year and beat views. Its AWS is at a whopping $100 billion annual revenue run rate. The AWS division is its most profitable business unit and continues to increase its profitability.
After several quarters of triple-digit earnings growth, projections show slowing but still enviable growth of 83%, 38% and 51% per share over the next three quarters. Full-year profit is expected to jump 74% then 25% in 2025.
Warren Buffett Stock Forming Base
Warren Buffett investment firm Berkshire Hathaway Class B share are forming a flat base with a 430 buy point. The S&P 500 stock pulled back to its 50-day line like a magnet, where it is finding support.
Shares were mostly unaffected by the technical problem that the high priced class A shares experienced on June 3.
The company released its first-quarter results and annual shareholder letter on May 4. Berkshire's operating earnings rose to $11.222 billion, up 39% over the prior year's quarter.
The company's quarterly revenue grew 5% to $89.87 billion, with help from its insurance underwriting and insurance investment income's robust growth. The revenue growth slowed from a 20%-21% range in the 2023 quarters.
The conglomerate finished the quarter with a record $188.99 billion in cash, up from $167.6 billion a quarter ago. Buffett expects its cash balance to reach $200 billion by the end of June.
Second-quarter estimates show earnings dropping 8% then 4% in the third quarter. In addition, analysts project sales to slide 4% in the current quarter, with the next two quarters each dipping 2%. FactSet's consensus estimate sees full-year earnings growth of 10% in 2024 and 3% in 2025.
Berkshire stock's up/down volume ratio of 1.3 shows renewed interest for shares over the last 50 days.
Weight-Loss Drug Giant Hits New High
Eli Lilly rose nearly 1.8% on Monday after n Food and Drug Administration advisory panel voted unanimously to recommend its experimental Alzheimer's treatment, donanemab.
Shares of the S&P 500 stock hit a record high Monday and have gained around 48% this year so far. The drugmaker is extended from the 793.67 buy point of a double-bottom base.
Shares stalled last Wednesday on news Eli Lilly will be losing its executive vice president and chief financial officer to Alphabet.
The stock gapped up 6% in heavy volume after the drugmaker reported higher-than-expected adjusted first-quarter earnings and lighter sales than views on April 30. Its weight-loss drug Zepbound crushed Wall Street's sales expectations, but diabetes treatments Mounjaro and Trulicity lagged forecasts.
Management raised its full-year revenue guidance by $2 billion to a range of $42.4 billion to $43.6 billion, which exceeded analysts' numbers. The higher profit and increased outlook prompted a slew of analysts to lift their price targets on the pharmaceutical company.
FactSet estimates show revised full-year 2024 earnings of $13.67 per share, more than double the $6.32 in 2023, and $19.14 in 2025.
Mutual funds have been adding shares, with 5,165 owning the drug stock in March, up from 5,019 in December and 4,819 in September. Eli Lilly is on IBD Leaderboard.
Insurance Stock Trending Sideways In Base
Insurance stock Allstate is in a newly formed second-stage flat base with a 177.37 buy point, according to MarketSurge. But shares are at the lows of the pattern and below the 50-day line. Allstate beat its first-quarter profit and sales estimates on May 1.
The insurer reported $5.13 in per-share earnings vs. a loss of $1.30 a year ago. Sales grew 11%, which were in line with the 9%-14% range of the previous four quarters. Sales growth is expected to increase 10% to 11% over the next four quarters.
FactSet full-year 2024 profit estimates call for $14.78 per share after two dismal years, including a loss in 2022.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
