Is Splunk the next big artificial intelligence software stock? Splunk's AI-driven software enables companies to search, correlate and analyze data in real time, and a lot faster than without its software, the company says. Splunk shares are up about 65% just since mid-October. On Tuesday, Splunk stock got a Relative Strength Rating upgrade to 84, of a best-possible 99.
The rating upgrade is notable because research shows that the best stocks tend to have an 80 or higher RS Rating in the early stages of their moves. Splunk joins the growing list of AI stocks to watch.
Splunk Stock In Top 3% Overall
Among its other key ratings Splunk stock has a near-best 97 Composite Rating, showing it's among the top stocks overall. Its 82 Earnings Per Share Rating reflects decent profit growth. Even better, it boasts an A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale, reflecting strong fundamentals.
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In terms of fundamentals, the San Francisco-based company reported a powerful upside earnings reversal last quarter, its fiscal first quarter. It went from a 32-cent loss a year earlier to an 18-cent profit, the equivalent of a 156% increase. The two quarters prior to last quarter, its EPS rose 324%, then 209%. Revenue last quarter rose 11% to $741.5 million, taking a break after heady sales growth of 32%, 40% and 39% the prior three stanzas. In May Splunk executives said they expect fiscal Q2 sales of $880 million to $895 million. A year earlier the company recorded $798.8 million sales.
Splunk stock is trying to complete a cup with handle with a 111.72 entry. See if it can break out in heavy trade. It trades above both its 50-day line and its 200-day. In May Splunk completed a long cup-with-handle pattern that began in August 2022. It failed to break out but has formed another cup with handle
Splunk Among Top 5 In Group
Splunk stock earns the No. 5 rank among its peers in the 26-stock Computer Software-Database industry group, according to IBD Stock Checkup. Software development platform provider Progress Software is No. 2 in the group. Cloud storing, sharing and collaboration provider MongoDB is No. 1 among the group's highest-rated stocks. The group itself has an outstanding A+ RS Rating.
When you're researching the best stocks to buy and watch, keep a close on eye on relative price strength.
IBD's proprietary Relative Strength Rating tracks price movement with a 1 (worst) to 99 (best) score. The rating shows how a stock's price movement over the trailing 52 weeks stacks up against all the other stocks in our database.
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