Meta Platforms, Fortinet and GE Aerospace rank among this week's top five stocks to watch near buy points. Waste Connections and W.R. Berkley also make the cut.
Fortinet stock belongs to the IBD 50 list of top growth stocks. Other top lists to check out for the best stock ideas include IBD Leaderboard as well as IBD SwingTrader and the IBD Long Term Leaders.
The relative strength lines for FTNT stock has bolted higher as earnings growth accelerates. The RS lines for the other four top stocks to watch are improving, a sign of strength in the current market. A rising RS line, the blue line in the charts shown, shows outperformance vs. the S&P 500 index.
The stock market flashed a red signal to investors last week, then clawed back losses. The major stock market indexes continued their comeback attempts on Monday. Investors could consider building stock watchlists, rather than buying stocks, if the markets stay on a wild ride.
Meta AI Stock
Meta, the parent company of Facebook and Instagram, stood out among the Magnificent Seven stocks this earnings season. Results underscored Meta's superior use of artificial intelligence (AI) early in an anticipated AI-powered growth cycle for leading stocks.
Shares jumped 6.1% to 517.77 last week, recovering the 10-week moving average. The internet technology stock found support at the 40-week line in late July after a three-week pullback from record highs.
Meta stock is on track to have a new base in another week. It edged a fraction lower on Monday. An early trendline buying opportunity may emerge if it clears the Aug. 1 high of 527.17, which came after earnings.
It would be a good sign if the RS line catches up with the stock. The RS line for Meta stock is trending higher but remains below April's all-time high.
On Aug. 1, Meta issued stronger-than-expected, second-quarter earnings and outlook. For Q2, Meta earnings jumped 73% on a 22% revenue gain. "Meta AI is on track to be the most used AI assistant in the world by the end of the year," Meta CEO Mark Zuckerberg said in a statement.
The company had announced the addition of Meta AI on Facebook, Instagram and WhatsApp in April to help its users "learn, create and connect with the things that matter to you."
On a per-share basis, Meta earnings rebounded 73% in 2023. Analysts expect 43% growth this year, slowing to a 14% gain in 2025. Sales are seen rising a respective 20% and 14% in 2024 and 2025. The social network's earnings cratered in 2022.
Meta earns an IBD Composite Rating of 95 and an EPS Rating of 96, both out of a best-possible 99. A 93 RS Rating means that it has outperformed 93% of all stocks in IBD's database over the past year.
Year to date, Meta stock has flung 45% higher, powered by an impressive earnings gap-up in February.
New Rally Sets Up; These Stocks Are Near Buy Points
GE Aerospace Stock
Shares of the new aerospace pure-play company jumped 4.3% last week, recovering the 10-week moving average. GE stock failed a late July earnings breakout amid Monday's sharp sell-off on recession fears, undercutting the lows of a flat base.
But shares quickly rebounded. With the aerospace stock now back above the 50-day/10-week lines, investors could still use 170.80 as a buy point. GE stock edged down a fraction on Monday.
GE stock is up 77% from a prior flat-base breakout last November, MarketSurge pattern recognition shows. A number of aerospace stocks are acting well amid geopolitical tensions, including Howmet Aerospace and Embraer.
GE stock owns an IBD Composite Rating of 98, EPS Rating of 85 and RS Rating of 96.
In Q2, GE Aerospace earnings soared 62%, driven by strength across the commercial, defense and services businesses. The company lifted full-year guidance.
Analysts expect an 85% earnings surge for the full year and a further 25% gain in 2025. The company emerged in April after the former GE's final split. Many analysts viewed this jet-engine business as the crown jewel of GE's portfolio of assets.
Year to date, GE stock has rocketed 64% on the back of a monster February-April rally. That reflected impressive earnings as well as enthusiasm about the emerging GE Aerospace.
Fortinet Stock Soars
Shares of the cybersecurity company rocketed more than 23% on earnings last week, snapping a string of four down weeks. They also recovered the 10-week and 40-week lines.
Fortinet stock gapped up 25.3% on Wednesday within a base with a 73.91 buy point. The base can be seen as either stretching back to February or a huge handle to a massive 55-week cup-with-handle pattern. FTNT may soon offer a handle entry in the six-month base. The cybersecurity software stock gained almost 1% to 70.34 on Monday.
The RS line has bolted higher with the share price but remains below the high of the six-month consolidation for now.
Software stocks have broadly picked up, led by medical, design and security plays.
Fortinet stock holds an IBD Composite Rating of 95, EPS Rating of 99 and RS Rating of 87.
The cybersecurity company boasts two straight quarters of accelerating earnings growth, capped with a 50% gain in the second quarter. It reported Wednesday that Q2 sales grew 11%, quickening from a 7% gain in Q1.
Analysts project 24.5% earnings growth for the full year, slowing to a 9% gain in 2025. While Fortinet continues to grow, it delivered 49% earnings growth in 2022 and 37% in 2023.
Year to date, Fortinet stock has jumped 20% thanks to the powerful August earnings move.
Waste Connections Stock In A Buy Range
Shares of the waste collection and disposal company rose 0.45% for the week, finding support at the 10-week line. MarketSurge shows Waste Connections stock in buy range from a June breakout past a 173.03 flat-base buy point.
Waste Connections stock holds an IBD Composite Rating of 95, EPS Rating of 94 and RS Rating of 88.
In Q2, Waste Connection's earnings growth accelerated to 21.6% and sales growth quickened to 11%, according to FactSet.
Analysts forecast 15% EPS growth for the full year and a further 13% gain in 2025. That earning growth is below the more the robust post-pandemic levels seen in 2021-2022. Its earnings fell in 2020 amid the coronavirus pandemic.
Year to date, Waste Connections has climbed 20.5%.
W.R. Berkley Stock Continue Its Advance
Shares of the insurance company advanced 3.5% last week, rallying further above the 10-week line.
A three-week advance has put W.R. Berkley stock within 4% of a 59.46 buy point from a saucer-shaped base. Shares are trading just above the July 19 high of 56.66, which serves as an early entry. They edged up a fraction on Monday.
This insurance stock holds an IBD Composite Rating of 97, EPS Rating of 99 and RS Rating of 85.
FactSet shows four consecutive quarters of earnings growth above 25%. But growth slowed from 56% in Q1 to 27% in Q2.
Analysts anticipate 26% profit growth in 2024 and another 5% rise in 2025. Though solid, W.R. Berkley's earnings growth is below 2021-2022 levels. Its earnings cratered in 2020 amid the pandemic.
Year to date, W.R. Berkley is up 21% owing to a late January earnings breakout.
