Will These Stocks Continue Their Impressive Rally?
The upcoming earnings season might just be the catalyst for a few stocks to soar. With the market's focus on earnings reports, Newmont, a gold mining powerhouse, and Amphenol, an AI hardware specialist, are poised to shine. But here's where it gets intriguing...
The third-quarter earnings season is off to a flying start, thanks to impressive performances from major U.S. banks. Despite market volatility, investor sentiment is on the rise. FactSet's John Butters predicts a remarkable 13% earnings growth for the S&P 500 this quarter, marking yet another period of double-digit profit expansion.
To identify the stars of this earnings season, we've scrutinized S&P 500 stocks, seeking those with growing Wall Street analyst optimism. Our criteria? A trifecta of positive indicators:
- Upward earnings estimate revisions: A minimum of 10 upward revisions in the last three months.
- Soaring price targets: Average analyst price targets up by 10% or more.
- Rising earnings estimates: A 10% or higher increase in average earnings estimates.
Newmont: Riding the Gold Rush
Newmont has become a poster child for the renewed interest in precious metals. Analysts have been bullish, revising earnings estimates upward an impressive 26 times in three months, with the average estimate jumping 21%.
This year, Newmont's stock has skyrocketed over 140%, riding the wave of gold's record-breaking price surge. However, a recent gold price pullback led to an 8% share price dip on Friday.
But don't be alarmed; Wall Street remains bullish on gold's prospects. The precious metal's safe-haven appeal, coupled with central bank support and global market volatility, continues to attract investors.
Joe Terranova, a renowned strategist, expressed his unwavering faith in Newmont on CNBC's Fast Money, emphasizing gold's portfolio diversification benefits. UBS analyst Daniel Major echoed this sentiment, citing improving fundamentals and lower 2026 expectations as reasons for his 'buy' rating.
Amphenol and Lam Research: AI Hardware Powerhouses
In the AI hardware realm, Amphenol and Lam Research are making waves. As key suppliers, their stocks have soared 96.5% and 80% this year, respectively, mirroring the AI infrastructure boom and data center expansion.
Analysts' confidence in these companies is evident, with numerous upward earnings estimate revisions in the past three months. Lam Research received 29 revisions, while Amphenol had 21.
Bank of America's recent upgrade of Amphenol, with a $150 price target, underscores its growth potential. This upgrade is based on AI rack demand, data center expansion, and strategic M&A activity.
Other Potential Surprises
Valero Energy and Globe Life are two dark horses that analysts are closely monitoring. Positive earnings surprises could be on the cards if their operational execution or market trends exceed expectations.
As earnings reports roll in, momentum is the name of the game. The S&P 500's anticipated fourth consecutive quarter of double-digit profit growth has investors seeking companies with robust earnings and analyst backing.
Newmont's gold market dominance, Amphenol's AI-driven rally, and Lam Research's semiconductor prowess highlight a trend: investors favor companies with strong fundamentals and exposure to macro trends.
If the positive earnings tone persists, next week's reports could propel the market higher. These momentum stocks are the ones to watch as Wall Street anticipates further gains. And this is the part most people miss—the potential for these stocks to continue their rally is a testament to the power of market sentiment and the impact of earnings surprises.
