Fund manager picks in recent weeks include Magnificent Seven stocks Microsoft, Amazon.com and Nvidia, according to IBD's screen of Stocks Funds Are Buying. But Amazon stock is extended, as is Nvidia.
Adobe is a key AI play that is getting funds' attention. Funds are also buying shares of restaurant stock Chipotle Mexican Grill.
Of these picks, Microsoft, Chipotle and Adobe are near buy points and are the focus of today's IBD's Screen Of The Day.
Microsoft is in buy range from a flat base's buy point of 384.30. Mutual funds own 42% of shares outstanding. Over the past eight quarters, more funds have bought MSFT stock. More recently, more funds are buying the software leader, giving the stock an Accumulation/Distribution Rating of B.
Microsoft has stellar IBD ratings. The Composite Rating and EPS Rating are 97 while the Relative Strength Rating stands at 90; 99 is tops in each category. Sales and earnings have accelerated over the past three quarters. In the September-ended quarter, sales grew 13% to $56.5 billion while earnings of $2.99 per share rose 27% from the year-ago quarter. The company will report fiscal second-quarter earnings on Jan. 30.
Adobe Forming Flat Base
Adobe is in a flat base with a buy point of 633.89. Shares are trading around the 50-day moving average as the base develops. Mutual funds own 49% of shares outstanding. More funds have also been net buyers of Adobe over the past five quarters.
Sales growth ranged from 9% to 14% over the past seven quarters, while earnings have grown 9% to 20%. In the fourth quarter ended Dec. 1, sales grew 12% to $5 billion while earnings per share of $4.27 climbed 19%. Adobe will hold its fiscal first-quarter earnings call on March 14 and has forecast sales of $5.13 billion at the midpoint and earnings per share of $4.40.
For the full year, the company expects sales of $21.4 billion and earnings of $17.80 per share. Meanwhile, more funds have been buying ADBE stock over the past five quarters and hold 49% of shares outstanding.
Funds Load Up On Amazon Stock
Chipotle will announce its fourth-quarter and full-year results on Feb. 6. CMG shares are just below a buy point of 2,348.42 after they formed a three-weeks-tight pattern. The stock also appears to be forming a new flat base.
Shares have risen as more funds bought CMG over the past three quarters. The stock has an Accumulation/Distribution Rating of B+.
Finally, Amazon stock is in buy range from a buy point of 148.50 from support at the 10-week moving average. More funds have purchased AMZN in the four most recent quarters. Fund sponsorship is also seen in its Accumulation/Distribution Rating of B.
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