S&P 500 stocks Broadcom, MercadoLibre, Elastic, Datadog and Shift4 Payments are in focus this week.
The market rally is looking resilient, with the S&P 500, Nasdaq and many leading stocks rebounding from key levels this past week. The market is still presenting investors with chances to add exposure and this should continue. However, investors should make sure they are not buying extended stocks.
These five stocks, including an S&P 500 giant, are all trading right around buy points and should be on investors' radar as they gauge the market and their holdings.
S&P 500: Broadcom Stock
AVGO shares edged up 0.7% Friday and 5.6% on the week to 1,107.68. The S&P 500 stock has formed an ascending base pattern with an official 1,151.82 buy point, according to MarketSmith analysis.
Broadcom stock is currently around 4% below that official entry. Shares are arguably actionable from the 21-day moving average and breaking a short trendline.
In early December, the San Jose, Calif.-based chipmaker and infrastructure software provider reported fiscal fourth quarter earnings and revenue that edged by Wall Street consensus estimates. Broadcom also forecast it expects to hit $50 billion in fiscal 2024 revenue, including recently acquired software maker VMware.
"The acquisition of VMware is transformational," Broadcom Chief Executive Hock Tan said at the time. Palo Alto, Calif.-based VMware provides cloud computing management and networking software.
Broadcom forecasts its semiconductors will sustain a mid- to high-single-digit revenue growth rate in 2024, "with the contribution of VMware" driving revenue to $50 billion and adjusted EBITDA (earnings before interest, taxes depreciation and amortization) to $30 billion.
Broadcom's 2023 revenue rose 8% to $35.82 billion. VMware had revenue of $13.61 billion in the 12 months ending Aug. 4, growing 3.5%.
The S&P 500 stock has a 94 Composite Rating out of a best-possible 99. AVGO also has a 95 Relative Strength Rating and an 88 EPS Rating.
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Elastic Stock
ESTC shares dipped 0.3% on Friday but gained 7.5% on the week to 111.94. Elastic stock now has a flat base with a 118.24 buy point. Investors could use Thursday's high of 114.53 as an early entry.
Barclays downgraded Elastic to equal weight, from overweight, on Friday while increasing its price target to 110, up from $100. The firm believes that after a strong 2023, software "needs to deliver" in 2024 on the promise of artificial intelligence and recovery.
The data software company at the end of November said generative artificial intelligence is boosting its sales as it reported better-than-expected fiscal second-quarter earnings. ESTC stock surged more than 30% on Dec. 1 on its earnings performance.
Elastic announced it earned 37 cents per share on $311 million in sales for the quarter ending in October. Revenue climbed 16% year over year, with earnings rising from a break-even quarter last year.
For the current quarter ending Jan. 31, Elastic forecast $320 million in sales. Wall Street predicts EPS growing 88% to 32 cents in fiscal Q3.
Elastic offers cloud-based search software for enterprise data, including security and observability solutions. Its Elasticsearch product allows enterprises to search across data sets and offers AI-powered insights.
The generative AI craze set off last year with the launch of ChatGPT has boosted interest in Elastic products, according to the company. Generative AI applications are powered by large language models, computer algorithms based on massive data sets.
ESTC stock is on the IBD Tech Leaders list.
MercadoLibre Stock
MELI shares jumped 4.2% Friday to 1,658.58. On the week, MercadoLibre stock leapt 7.8%, rebounding from the 10-week line
MercadoLibre closed just below its 1,660 flat-base buy point after topping that briefly on Friday. Shares are actionable from various early entries.
Sometimes called the Amazon.com of Latin America, MercadoLibre doesn't boast a cloud-computing arm but does have a booming payments business. Founded in Argentina by Marcos Galperin in 1999 and now headquartered in Uruguay, MercadoLibre operates in 18 countries, with Brazil, Mexico and Argentina its largest markets. MELI stock debuted on the Nasdaq in 2007, priced at 18. The firm now has a market cap around $80 billion.
MercadoLibre boasts three straight quarters of triple-digit earnings gains, with revenue growth picking up to 40% in Q3.
Its Nasdaq-listed shares have surged 86% in 2023. MercadoLibre stock has a perfect 99 Composite Rating, a 93 Relative Strength Rating and an 82 EPS Rating.
Datadog Stock
DDOG shares advanced 1.75% on Friday. On the week, Datadog stock advanced 6% to 121.52, back above a 120.26 buy point. Shares are also near the top of a short consolidation next to a deeper base. Investors could use 123.69 as an alternate entry.
The week's rally saw DDOG stock bounce off its 10-week line.
Datadog reported better-than-expected third-quarter earnings and revenue on Nov. 7, sending DDOG shares 29% higher.
Datadog provides a cloud-based monitoring and analytics platform. The company turned its first annual profit in 2020 and analysts expect 2023 earnings to grow 53% to $1.50 per share.
DDOG is 40% off its all-time peak near 200.
Shift4 Payments Stock
FOUR stock jumped to a two-year high of 78.97 intraday, clearing a 76.51 handle entry before reversing lower for a 0.3% decline to 74.72. Shares still jumped 6.1% for the week. Shift4 Payments had flashed an early entry but at this point investors should likely wait until retaking the 76.51 buy point.
Shift4 Payments is an independent provider of payment acceptance and payment processing technology solutions in the U.S. Its payment processing includes credit, debit, contactless card, and QR pay among other alternative payment methods.
As it expands into new payment markets, Shift4 earnings growth has hit triple digits for the past two quarters.
The financial technology company was handed several price target hikes this week, including Goldman Sachs, Truist and Piper Sandler.
The stock has a 94 Composite Rating. FOUR has an 89 Relative Strength Rating. The EPS Rating for FOUR is 82.
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