Broadcom and Goldman Sachs lead this weekend's watch list of five stocks above traditional or early buy points, all of which have etched out flat bases that signal resilience in a choppy market. In addition to AVGO and GS, the list includes two AI-fueled enterprise software plays in ServiceNowand ExlService Holdings, as well as pipeline operator Energy Transfer.
With the fourth-quarter earnings period in full swing and the Trump rally finding its footing in the past week, thanks to soothing inflation readings, Goldman Sachs and Energy Transfer have staged breakouts, while Broadcom stock, ServiceNow and EXLS are flashing early entry opportunities.
Broadcom and ExlService stock are part of the flagship IBD 50 list of leading growth stocks. SwingTrader has opened positions in ServiceNow stock, Goldman Sachs, Broadcom and the Global X MLP & Energy Infrastructure ETF that lists ET among its top holdings.
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, Thursday's IBD Stock Of The Day, has etched out a five-week flat base since vaulting on its Dec. 12 fiscal Q4 earnings report. The upside was modest, but the reaction to Broadcom's outlook was explosive, with $60 billion to $90 billion in AI-driven revenue from its top 3 custom-chip customers seen for 2027.
Broadcom has multiple quarters of accelerating earnings and revenue growth, contributing to its superlative 99 IBD Composite Rating, according to IBD Stock Checkup. The rating factors in both fundamental and technical data.
SwingTrader opened a position in AVGO on Thursday as it reclaimed its 21-day exponential average and broke a short-term downtrend, offering an early entry. Broadcom, which rallied 5.85% on the week to 237.44, has an official buy point of 251.88.
Goldman stock
Goldman Sachs gapped past its 50-day moving average and an early entry point on Wednesday, as it posted Q4 earnings of $11.95 a share, up 118% from a year ago and $3.74 ahead of estimates.
Morgan Stanley hiked its GS price target to 782 from 736, citing "high conviction that we are at the early stages of a multiyear capital markets cycle." Morgan Stanley sees Goldman Sachs as being the best positioned among covered stocks to benefit and expects "more blowout quarters throughout 2025."
Goldman Sachs stock rallied 11.8% to 625.94 for the week. Shares cleared a 612.73 buy point. The buy zone runs through 643.37.
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ServiceNow Stock
ServiceNow was Friday's IBD Stock Of The Day . The Santa Clara, Calif., company's cloud-based software platform automates IT processes, integrates with other enterprise-software platforms and churns out analytics for informed decision-making.
In a Dec. 12 note, Truist analyst Joel Fishbein wrote that ServiceNow had expanded its addressable market by $54 billion, moving into adjacent markets as legacy providers struggled to deal with increasingly complex IT environments. On Dec. 10, Cowen analyst Derrick Wood hiked his NOW price target to 1,300 from 1,025, saying the company is in the early innings of a powerful AI product cycle, with two more data-focused products set for release early this year.
NOW rose 4.6% to 1,071.48 for the week, closing the week just above its 10-week and 50-day moving averages. NOW is actionable on the break of the downtrend from its Dec. 11 high, but look for a more convincing move past its 10-week line.
ServiceNow is set to next report earnings on Jan. 29.
In a recent interview with IBD, Chief Executive Bill McDermott talked about ServiceNow's artificial intelligence strategy.
ExlService Stock
ExlService was featured as IBD Stock Of The Day on Dec. 18, before its recent move higher. The company, which provides data management solutions for the insurance industry, health care, banking and more, is now capitalizing on its industry-specific knowledge to deliver tailored solutions that empower clients with AI-driven analytics.
One example is ExlService's insurance LLM, or large language model. CEO Rohit Kapoor said on the Oct. 30 Q3 earnings call that it is "specifically designed to handle the nuances of auto bodily injury, workers' compensation and general liability claims." He added that the model was "live" with a large U.S.-based casualty and life insurer and a regional casualty insurer.
After the Q3 report, William Blair analyst Jesse Wilson noted that deals over $25 million had grown by more than 25% from a year ago, adding that AI-related deals should increase gross margins.
EXLS stock powered up 2.5% to 46.25 on Monday, breaking above its 50-day line and flashing an early entry. Shares closed the week up 4.5% at 47.15. Shares finished just below a 47.37 buy point from a six-week flat base after topping that level intraday Friday.
Earnings are expected around Feb. 27, according to FactSet.
Energy Transfer Stock
Energy Transfer operates more than 130,000 miles of pipeline and related energy infrastructure in 44 states, transporting crude oil, natural gas and handling fractionation of natural gas liquids into distinct products.
On Dec. 6, Energy Transfer said it would begin construction of an intrastate natural gas pipeline connecting the Permian Basin to premier markets and trading hubs to serve growing demand. On Dec. 19, the company entered into a 20-year agreement to supply Chevron with 2 million tons of liquified natural gas, or LNG, per year.
Bank of America raised its price target for Energy Transfer to 23 from 20 on Jan. 10, keeping a buy rating. The firm listed ET as a favorite midstream name for 2025, highlighting three factors propelling the group: an increase in Permian natural gas and liquids growth; belief that the reliability and speed to market of natural gas makes it a logical choice for data-center expansion; and an LNG rally in the wake of Donald Trump's election victory.
ET rose 4.5% to 20.29 last week, clearing a 20.02 buy point from a six-week flat base. The buy zone runs through 21.02.
ET plans to report on Feb. 11.
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