For those waiting to put their money to work, what are some good stock picks? Stocks have rallied from their Aug. 5 lows, allowing investors to gradually increase their exposure. Investors' Business Daily's current recommendation is 60%-80% exposure. So how do you look for signs of strength in stocks?
Technical analysis and profit estimates are two ways of telling and are also among the four pillars of IBD's methodology for choosing stocks. Nvidia stock along with three others near buy points are on the IBD Stock Screener's list of Rising Profit Estimates.
Nvidia is around 10% off its all time high, according to IBD MarketSurge. Shares have also formed a late-stage base with a buy point at 140.76. The AI chip leader will report second quarter results on Wednesday. But analysts are already predicting rising profits for the full year.
Estimated earnings of $2.72 for 2025 suggest an increase in profit of 109%, while for 2026, analysts are expecting a 40% increase in earnings to $3.82 per share. Nvidia continues to be a market leader and holds a near ideal Composite Rating and Relative Strength Rating of 98. Strong earnings and sales growth in recent quarters have paid off as well: Nvidia stock boasts the best EPS Rating, 99.
A second Magnificent Seven stock to find a place on the rising estimates screen is Meta Platforms. The stock is in a consolidation with a buy point of 542.81 after gapping up on earnings on Aug. 1. Analysts see profit rising 37% in 2024 for the social media giant, to $21.26 per share.
For 2025, analysts expect profits to rise 14% to $24.13 a share. Meta's EPS Rating is nearly ideal at 97. The Composite Rating is 93 while the Relative Strength Rating of 92 also shows the stock has outperformed the majority of stocks in the IBD database.
Analysts are also bullish on Arista Networks. Shares are approaching a buy point of 376.50. Although trading near their all-time high, shares are in an early-stage base. According to FactSet's consensus, profit will rise 19% in 2024 and 14% in 2025.
In retail, Abercrombie & Fitch is just above the 50-day moving average as it forms a cup base with a buy point of 196.99. For the fiscal year ending in January, analysts expect a 56% increase in profit followed by a 4% increase the next fiscal year. Abercrombie was the best stock of 2023 in IBD's annual roundup and is building on that terrific gain.
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