AI stocks Meta Platforms and Oracle lead the parade of top five stocks to watch near buy points this week. Netflix, TG Therapeutics and GoDaddy also make the cut.
Meta stock and Netflix stock eye buy points. TG Therapeutics broke out last week while GoDaddy briefly did. Oracle stock may offer a pullback opportunity.
Within this group, Meta and TG Therapeutics stock belong to the IBD 50 list of top growth stocks. Further, Meta stock is in the IBD Big Cap 20 and Leaderboard. Other IBD lists for the best stock ideas include Long Term Leaders as well as SwingTrader.
The relative strength lines for Netflix and TG Therapeutics are near highs as they try to break out, a favorable sign. The RS lines for the other top stocks to watch are 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.
Meanwhile, some major corporate earnings have pressured the stock market. Investors should carefully weigh new purchases in light of earnings volatility and election uncertainty.
Meta Stock
Shares of the Facebook and Instagram parent dropped to near 567 on earnings last week, finding support at the 10-week moving average. Despite the downside reversal, Meta stock continues to work on a shallow base above a prior consolidation. It needs another week for a flat base. Shares fell on Monday.
A strong rebound from the 10-week line would offer an early entry, with the buy point at 602.95, which marks the Oct. 7 high.
The RS line for Meta stock is improving after summer sluggishness, according to the MarketSurge chart. It shows a strong uptrend since late 2022. That is a sign of longer-term outperformance.
Meta earns a near-perfect IBD Composite Rating of 98 out of 99. Meta stock shows a superior EPS Rating of 96. For the third quarter, the social networking giant on Thursday posted 37% earnings growth, year over year, on a 19% revenue gain. Though robust, growth on both the top and bottom lines slowed vs. the prior quarter.
For the full year, analysts expect a 49% earnings gain followed by a 12% increase in 2025, according to FactSet. Facebook delivered a 73% earnings leap in 2023. Future drivers of growth include artificial intelligence, or AI. The company is using Meta AI to improve its core business.
The latest quarterly report showed active users of Meta's social networking apps grew 5%. But Meta stock's downside reversal on earnings reflected concerns about elevated AI spending.
More than a dozen analysts raised price targets on Meta stock after the Q3 report, FactSet shows.
Meta is among the Magnificent Seven stocks that have been driving the stock market higher. Meta stock flourishes an RS Rating of 90, meaning it has outperformed 90% of all stocks in IBD's database over the past year.
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Oracle Stock
Shares of the database software provider are pulling back to near the 10-week moving average. Oracle stock staged an earnings breakaway gap in September, growing quickly extended from a 146.59 buy point. A strong rebound from the 10-week could offer an entry.
Meanwhile, Oracle has shaped a three-weeks-tight pattern. The official entry is 178.61, with Tuesday's high of 176.16 providing an early entry. Shares eased a fraction on Monday, near 170.
Oracle stock owns an IBD Composite Rating of 95, EPS Rating of 84 and RS Rating of 93. On Sept. 10, the company turned in 17% earnings growth and 7% sales growth for its fiscal first quarter. That was the best bottom-line result in years. The tech giant credited strong AI demand for its Q1 beat.
Partnerships with the leading cloud services providers could power a major "cloud migration story" with wider implications for Oracle stock, analysts say. For the full fiscal year, they expect 13% earnings growth, rising a further 14% next year. Oracle's fiscal year ends in May.
Netflix Stock
On Oct. 18, shares of the video streamer gapped up 11% on earnings. They have been trading tightly since then, near 760. Netflix stock now eyes a 773 buy point from a three-weeks-tight pattern. Last Tuesday's high of 763.88 could provide an early entry. Shares were roughly unchanged on Monday, near 755.
Netflix holds an IBD Composite Rating of 99, EPS Rating of 98 and RS Rating of 92.
On Oct. 17, Netflix delivered a beat-and-raise report for the third quarter. One analyst declared the firm the "clear victor" in the video streaming wars. On Thursday, IBD picked Netflix as Stock of the Day.
In Q3, Netflix delivered 45% earnings growth and 15% sales growth. Though strong, both slackened slightly from the prior quarter's clip. Analysts now expect the company to deliver a 64% earnings surge for the full year and a 20% gain next year.
TG Therapeutics Stock
Shares of the commercial-stage biopharmaceutical company cleared an early entry of 24.86 last Tuesday. TG Therapeutics stock proceeded to briefly clear a 26.41 buy point from a shallow cup base on Friday. Shares plunged 9.4% on earnings Monday, but found support at the 50-day moving average.
TGTX stock holds an IBD Composite Rating of 96, EPS Rating of 73 and RS Rating of 97. For the latest quarter, TG delivered a two-cent profit on 84% sales growth. That was the second straight quarter of positive earnings after losses in prior quarters. Analysts expect TG to deliver a massive earnings jump in 2025 after an expected decline this year. Sales are seen growing 40% for full-year 2024 and 54% in 2025.
TG Therapeutics markets Briumvi as an easier treatment option than rivals for multiple sclerosis. After initially receiving two loading doses, patients switch to Briumvi's maintenance schedule. That requires a one-hour infusion every six months. Other MS drugs require more frequent infusions.
GoDaddy Stock
Last Thursday, shares of the website hosting company broke out to highs on earnings. The earnings breakaway gap came in the biggest volume since the base began to form, a positive sign. But GoDaddy stock is now below the 166.17 cup-with-handle buy point. Shares rose almost 1% on Monday, above the 50-day line but still below the latest entry.
GoDaddy stock holds a Composite Rating of 89, EPS Rating of 99 and RS Rating of 92.
On Thursday, the company posted a 48% earnings leap on 7% higher revenue, topping forecasts. Analysts expect a challenging Q4 to weigh on full-year earnings, which are likely to fall 29%, FactSet shows. But they see a rebound to 2% earnings growth next year.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
