Facebook and Instagram parent Meta Platforms, JD.com and Brown & Brown are on our stock watchlist this week. US Foods and Rubrik round out the five top stocks to watch.
All five top stocks to watch trade near buy points. JD stock provided an early entry on Wednesday. Brown & Brown insurance stock broke out on Tuesday and edged higher in buy range on Wednesday.
But IBD lowered its stock market exposure level last week as the major indexes tumbled, led by growth stocks. Stocks at large extended declines earlier this week but bounced back on Wednesday.
Meta stock is on IBD Leaderboard. Other top IBD lists for the best stock ideas include the IBD 50 list of top growth stocks and Long Term Leaders, as well as Big Cap 20 and SwingTrader.
The relative strength lines for all five top stocks near buy points are generally trending higher or improving. A rising RS line, the blue line in the charts shown, shows a stock's outperformance vs. the S&P 500 index.
Meta Stock Still Magnificent
Shares of the Magnificent Seven stock rallied 2.5% to 673.70 on Wednesday, snapping a six-session slide. Investors could use the Feb. 19 high of 707 as an early entry. The recent slide followed a historic 20-day winning streak earlier in the new year.
On Tuesday, Meta stock found support at its 50-day line. It is now looking to regain the 21-day exponential moving average.
Unlike many other Mag 7 stocks, Meta stock remains not far from all-time highs. It successfully cleared a 638.40 buy point from a six-week flat base on Jan. 24, according to the MarketSurge chart. The internet stock ran past the 5% chase zone amid a stronger-than-expected earnings report on Jan. 29.
Last Friday, IBD selected Meta as Stock of the Day as it eyed the new buy point.
Meta stock earns a perfect IBD Composite Rating of 99. It shows a superior EPS Rating of 96 and an RS Rating of 92, also out of a best-possible 99. A 92 RS Rating means that Meta stock has outpaced 92% of all stocks in IBD's database over the past year.
The social networking giant shows one quarter of accelerating earnings and sales growth. The IBD Stock Checkup tool shows that Meta averaged 49% earnings growth over the last three quarters, above the three-year rate of 27%.
Meta's latest rally (before its decline last week) was helped by its Q4 earnings and sales beat on Jan. 29. Investors also shrugged when Meta CEO Mark Zuckerberg announced $60 billion-$65 billion on capital expenditures this year, focused on AI infrastructure, well ahead of previous estimates. The sudden emergence of DeepSeek, and its lower-cost AI models, has made some investors uneasy about big AI spending. But Meta appeared to get a pass.
Analysts say Meta has been especially adept at weaving AI technologies into its products and services.
Year to date, Meta stock flourishes a 15.1% gain.
Nvidia Looms After Market Sell-Off
JD Stock: China Recovery Play
Shares of JD.com jumped 6.1% in above-average volume on Wednesday. The move above resistance around 43 offered an early entry to investors. JD stock managed a 2.5% gain last week as China stocks bucked the U.S. market sell-off. JD stock eyes a 47.82 buy point from a cup base, still well below that traditional entry.
JD.com is an e-commerce giant, second only to Alibaba in China. In recent months, China stocks whipsawed on stimulus hopes and disappointment, along with new tariffs under President Donald Trump. Still, several U.S.-traded China stocks are now showing strength. Some market watchers see early signs of a China recovery, thanks to rate cuts and artificial intelligence (AI) growth.
JD stock holds a Composite Rating of 94, EPS Rating of 99 and RS Rating of 94.
Q3 earnings jumped 35% vs. a year earlier after Q2's 73% gain. Sales, which had barely risen or fell over several quarters, picked up to 9%.
JD.com likely will report Q4 results in early March. Alibaba, which easily beat earnings estimates on Feb. 20, hit the profit-taking zone from its mid-February breakout.
Year to date, JD stock holds a 22.7% gain.
Brown & Brown Insurance Stock
Shares of Brown & Brown cleared a 114.15 buy point from a 12-week, cup-shape base on Tuesday. BRO stock nudged up in buy range on Wednesday.
The RS line made a new high as the insurance stock broke out, a bullish sign. That is marked by a blue dot on that strength indicator in the weekly MarketSurge chart.
On Feb. 19, IBD had named Brown & Brown as Stock of the Day as it neared the cup-shape buy point.
Brown & Brown owns a Composite Rating of 96, EPS Rating of 95 and an RS Rating of 87.
The property and casualty insurer shows one quarter of earnings and sales acceleration. In the latest quarter, earnings grew 48% with sales increasing 14.5%. Analysts expect that in 2025 both earnings and revenue will expand 9%, according to FactSet.
This insurance stock has jumped 12.3% year to date.
Insurance stocks rallied broadly on Monday amid a flight to safety. IBD chose Progressive as Stocks of the Day as shares broke out. Berkshire stock also broke out after robust Berkshire Hathaway earnings.
US Foods Stock
Shares of the food distributor edged up 0.6% on Wednesday. They have held above the 50-day line during the recent market sell-off.
US Foods stock is now just 3% below a 72.84 cup-shaped buy point, first cleared on Feb. 6. Shares are recovering from an earnings shakeout in mid-February.
US Foods stock holds an IBD Composite Rating of 98, EPS Rating of 95 and RS Rating of 88.
On Feb. 5, IBD chose USFD stock as Stock of the Day as it neared the 72.84 buy point ahead of earnings. On Feb. 13, the company posted its third straight quarter of accelerating earnings growth, capped by a 31% gain for the fourth quarter.
Morgan Stanley analysts see brighter prospects for the restaurant sector in 2025 and models U.S. industry growth this year of almost 5% vs. 4% last year. This bodes well for US Foods, a partner to about 250,000 restaurants and food service companies.
Year to date, US Foods stock is up 4.7%.
Rubrik Stock
Shares of the data security software firm rallied 3.1% on Wednesday after five down days. Rubrik stock has wilted from a short consolidation entry cleared at the end of January. But a bounce above the 50-day/10-week lines would make RBRK stock actionable again.
The RS line for Rubrik stock bolted higher in December 2024 and remains not far from highs.
Rubrik stock holds an IBD Composite Rating of 74, EPS Rating of 43 and RS Rating of 97.
The software company is likely to report in March. For its third quarter, Rubrik reported a narrower-than-expected loss last December and revenue jumped 43%, topping expectations.
Rubrik sells a cloud-based data backup and recovery platform to protect against ransomware attacks. Rubrik garners about 85% of revenue from subscription software sales.
Subscription-based annual recurring revenue, a key metric, surged 38% in the latest quarter, above views.
Rubrik stock is up 0.7% year to date.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
