Broadcom, the AI chip stalwart, and law-enforcement tech leader Axon lead this weekend's watch list of five stocks near buy points. AVGO, Axon and internet-of-things cloud company Samsara all boast a highest-possible 99 IBD Composite Rating, a single rating combining fundamental and technical factors.
They're joined by fast-growing cruise line Royal Caribbean Group, with a stellar 98 Composite Rating, according to IBD Stock Checkup. S&P Global, the credit-ratings and financial data provider, rounds out the list with a solid 88 Composite Rating.
Axon and RCL are part of the IBD Leaderboard portfolio of elite stocks, while IOT is on the Leaderboard watch list. Broadcom, Axon and Samsara are all part of the flagship IBD 50 list of leading growth stocks.
Axon and IOT also are new SwingTrader positions.
S&P 500, AI Stock Set-Up
The S&P 500 rose 1.5% for the week, finishing less than 0.1% below its Jan. 23 record closing high. Markets got a brief scare from Wednesday's hot consumer price index, but tame healthcare inflation data on Thursday showed that disinflation progress continues. That will give the Federal Reserve more space to look through any temporary inflation effect from Trump tariffs, without letting monetary policy get too tight.
As of Friday, 77% of S&P 500 companies have reported Q4 earnings, with a blended 16.9% growth rate, according to FactSet. If it holds, that would be the best in three years.
Arguably, the most-critical earnings report for the market, and especially AI stocks, is due Feb. 26, when Nvidia reports results for its January fiscal fourth quarter. That will set the tone for Broadcom, which posts its fiscal Q1 earnings on March 6.
Be sure to read IBD's The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
Broadcom Stock
Broadcom and Nvidia have found their footing since Chinese startup DeepSeek triggered a momentary panic on Jan. 27 with its low-cost methods for training and running AI models. Confidence has been restored by heady capital spending announcements from the likes of Amazon.com, Alphabet, Microsoft and Meta Platforms.
Broadcom makes custom AI server chips for Google, Facebook parent Meta and TikTok-owner ByteDance. It also is designing AI inference chips for ChatGPT creator OpenAI and Apple.
On Jan. 28, JPMorgan analyst Harlan Sur predicted that the efficiency gains would spark a "faster unlock" of demand for AI semiconductor solutions. He highlighted Broadcom and Marvell as beneficiaries, citing cost and power performance advantages of their chips customized for specific applications.
Broadcom rose 3.6% to 233.04 last week. A move past 237.93 would flash an early entry for AVGO on a move clear of its 200-day moving average, visible on a weekly MarketSurge chart. The 237.93 level is also a buy point from a handle formation on the end of a nine-week consolidation.
Axon Stock
Axon was featured as IBD Stock Of The Day on Monday, as the innovator of the Taser and cloud-based evidence management sees generative AI-related sales take off and its drone business gain momentum.
Draft One can write the first draft of police reports in a second, using audio uploaded to the cloud from officers' body cameras. After Draft One became Axon's fastest-selling new product in its history last year, Axon has several other AI applications that it will roll out this year. That includes Live Translation, which uses cloud-connected body cameras to enable real-time translation between two speakers in 100 languages.
Axon rose 2.8% to 683.41 in Friday stock market action. SwingTrader opened a position on Friday near 670 as Axon reversed higher while etching a handle formation in a cup-with-handle pattern. Friday's action also saw Axon break above the downtrend in its handle, which aggressive investors sometimes use as an entry.
The handle buy point is 689.54, according to MarketSurge.
Axon earnings are due after the close on Feb. 25.
Samsara Stock
Samsara was featured as IBD Stock Of The Day on Tuesday, ahead of its latest breakout. The San Francisco company provides sensors and cloud-based software to manage vehicle fleets and other physical operations through its Internet of Things platform.
In Samsara's Dec. 5 fiscal Q3 earnings call, CEO Sanjit Biswas said the company had its second best quarter for adding customers with over $100,000 in annual recurring revenue. Those 170 high-revenue customers include No. 3 pizza-delivery company Papa Johns and a Fortune 500 confectionary, food and beverage company.
Biswas cited an IDC survey that estimated that an average Samsara customer realizes $2 million in savings per year, equating to a return on investment of more than 800%.
Samsara posts fiscal Q4 earnings on March 6.
IOT powered up 4.6% to 58.96 on Friday, clearing a 57.51 buy point from an 11-week cup base. The buy zone runs through 60.39.
SwingTrader opened a position in IOT at 58.05 as it moved into a buy zone.
Samsara's relative strength line, the blue line in IBD and MarketSurge charts that tracks a stock's progress vs. the S&P 500, is also breaking out to a new high. That's a confirmation of market leadership.
Royal Caribbean Stock
Royal Caribbean was featured as IBD Stock Of The Day on Thursday as it re-entered a buy zone. The company posted 30% earnings growth and 13% revenue growth in Q4, touting its best five weeks for bookings in company history.
Morgan Stanley hiked its RCL price target to 270 from 225 on Friday, keeping an equal weight rating on the stock. The analyst called Royal Caribbean "the most ambitious" cruise line with its plan to triple capacity in coming years. By comparison, Morgan Stanley has an underweight rating on Carnival and says Norwegian Cruise Line "risks being left behind."
IBD discusses the best opportunities for investing in travel stocks in this new video.
RCL rose 1.15% to 263.09 on Friday, after reclaiming a 258.70 cup-base buy point on Thursday. The buy zone runs through 271.64.
S&P Global Stock
S&P Global was featured as IBD Stock Of The Day on Wednesday, a day after topping Q4 estimates with 20% EPS growth on 14% sales growth. The company's outlook builds in 8% to 10% earnings growth and 5% to 7% sales growth in 2025.
In the Q4 earnings call, CEO Martina Cheung said that bond issuance for paying customers neared $4 trillion in 2024, thanks to "extremely favorable market conditions," including tighter credit spreads and falling interest rates. That creates a tough comparison for 2025, but she said refinancing of a wall of maturing debt and a recovering M&A environment will contribute to "modest growth."
S&P highlighted $1.5 billion generated in revenue generated from new or enhanced products in 2024, accounting for 11%. Those include Carfax, which provides vehicle history and valuation information for the used car market; LNG price assessments; and stablecoin assessments.
SPGI dipped 0.5% to 539.69 on Friday, after clearing a 533.29 buy point from a 16-week flat base on Tuesday. The buy zone runs through 559.95.
