For those waiting to put their money to work, what’s a good stock to pick? With stocks rising from their lows on August 5, investors can gradually increase their exposure. Investors’ Business Daily’s current recommendation is for a 60% to 80% exposure. So how do you look for signs of strength in a stock?
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How to buy stocks: choosing the best stocks at the right time
Technical analysis and earnings forecasts are two of the decision-making methods and are among the four pillars of IBD’s stock-picking methodology. Nvidia stock appears on IBD Stock Screener’s Rising Earnings Forecast list, along with three other stocks near buy points.
Nvidia (NVDA) is down about 10% from its all-time high, according to IBD MarketSurge. The stock is forming a late base with a buy point at 140.76. The AI chip leader reports second-quarter results on Wednesday, but analysts are already predicting full-year profit growth.
Projected earnings of $2.72 for 2025 suggest a 109% increase in earnings, while for 2026, analysts expect earnings per share to rise 40% to $3.82. Nvidia remains the market leader, holding a near-ideal Composite Rating and Relative Strength Rating of 98. Strong earnings and sales growth in recent quarters has also paid off, with Nvidia shares boasting the highest EPS Rating of 99.
The second of the Magnificent Seven stocks on the upside forecast screen is Meta Platforms (META). The stock is consolidating with a buy point of 542.81 after surging on earnings on Aug. 1. Analysts expect the social media giant’s earnings to grow 37% to $21.26 per share in 2024.
Analysts expect earnings to grow 14% to $24.13 per share in 2025. Meta has an EPS Rating of 97, which is nearly ideal. Its Composite Rating of 93 and Relative Strength Rating of 92 also indicate that the stock is outperforming most stocks in the IBD database.
Analysts are also bullish on Arista Networks (ANET). The stock is approaching a buy point of 376.50. Though it is trading near all-time highs, the stock is still in its early stages. According to FactSet consensus, earnings will grow 19% in 2024 and 14% in 2025.
In the retail sector, Abercrombie & Fitch (ANF) is trading slightly above its 50-day moving average, forming a cup base with a buy point of 196.99. Analysts expect earnings to grow 56% for the fiscal year ending in January and 4% in the next fiscal year. Abercrombie was IBD’s best stock for 2023 in its annual roundup and is building on its impressive earnings.
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