As the stock market extends its rally to new highs, it's important to watch the stocks most loved among equity analysts. Broadcom and GE Aerospace are two of the seven best stocks where investors can find magnificent profit growth prospects.
Arista No. 1 In Networking
Arista Networks is the No. 1 stock in the computer networks industry group, boasting a 99 Composite Rating. The company's EPS Rating also is a perfect 99 following earnings gains of 30%, 25%, 30% and 38% the past four quarters. Sales growth accelerated 20%, 25%, 28% and 30%.
At its analyst day Sept. 11, the company forecast 20% revenue growth in fiscal 2026 to $10.5 billion, slightly above estimates. Arista expects its AI networking revenue will grow 70% in 2026 to around $2.75 billion as capital spending ramps up for cloud computing.
Arista stock fell sharply Sept. 12 as analysts mulled artificial intelligence-related guidance and the company's three-year financial targets.
Shares climbed back above its 200-day moving average June 26. They topped resistance around the 100 price level and found support at the 21-day exponential moving average. Shares cleared a short consolidation near 142, and remain above that level despite the Sept. 12 tumble.
Of 29 analysts who cover Arista, 79% have the highest ratings on the stock. The consensus 2025 earnings estimate is $2.81 per share, an increase of 24%.
Arista Networks, which makes cloud-computing network equipment, is buying VeloCloud from Broadcom. VeloCloud sells software-defined wide-area network technology. Analysts generally had a positive reaction to the deal. Terms weren't disclosed.
Broadcom Another Tech Leader
Broadcom is among the magnificent earnings leaders, after posting EPS gains of 28%, 45% and 44% and 36%. Its EPS Rating is 98, and its Composite Rating is 99.
On Nov. 4, the company beat analyst estimates for its fiscal Q3 and guided sales above views for the current quarter.
The company is one of the most widely followed on Wall Street, and most are bullish. Of nearly 50 analysts who cover the company, 94% have buy ratings on the stock.
Analysts expect the chip company to earn $6.75 a share in the fiscal year ending in October. That would be a 38.6% increase year over year. It also would be far better than the gains over the two previous fiscal years in the teens.
Silicon Valley-based Broadcom is benefiting from President Donald Trump's push to ensure the U.S. leads artificial intelligence technology. Announced in July, the president's Strategy includes expediting permits for new data centers and semiconductor fabs, and initiatives to increase high-demand jobs. It may also lead to more chip exports to China, which is under U.S. restrictions.
Broadcom stock has shaken off some selling when Trump said semiconductor tariffs were coming. The actual proposal left untouched companies that plan to expand capacity in the U.S.
Broadcom is the top designer of application-specific integrated circuits, or ASICs, for artificial intelligence in data centers. Its customers include Alphabet's Google and Meta Platforms.
The stock climbed to a record high this month after finding support at the 10-week line.
Amphenol Earnings
Amphenol has surged more than 50% from its breakout at 79.39 on May 2. The stock also cleared a four-weeks-tight pattern with a buy point of 112.35.
The company's July 23 earnings report sailed past expectations, and the EPS Rating is now a perfect 99. Earnings growth accelerated 28%, 34%, 58% and 84% the past four quarters, as sales gains also accelerated.
The company's Composite Rating also is 99. Both ratings are highest in the electronic parts industry group.
Connecticut-based Amphenol makes interconnection products, fiber-optic connectors, antennas, sensors and specialty cables. Those types of products are in heavy demand as data center construction booms.
On Aug. 4, Amphenol announced it acquired CommScope Holding's connectivity and cable unit in a deal valued at about $10.5 billion. The unit makes fiber-optic and copper connectivity cables for cable television, residential broadband networks and data centers. Also in August, Amphenol said it plans to acquire Trexon, which makes cable assemblies for military use, for $1 billion in cash.
Analysts' consensus earnings estimate for this year is $3.03, an increase of 60.4%, according to FactSet. Of 20 analysts who cover Amphenol, 13 have the highest rating and the rest have hold recommendations.
GE Aerospace Earnings
GE Aerospace beat expectations July 17 as it reported a 38% increase in earnings and a revenue jump of 21% for the second quarter. Management raised its full-year outlook, putting adjusted revenue growth in the midteens vs. its prior forecast for low-double-digit growth.
After the latest report, GE stock has a 98 EPS Rating, which ranks first among 73 stocks in the aerospace and defense industry group. The Composite Rating is also 98.
As a major manufacturer of jet engines and aviation systems, GE Aerospace faces tariff risks. Yet, the stock is trading at all-time highs, holding support above its 10-week moving average.
On Sept. 4, the company announced a partnership in Beta Technologies, which develops electric aircraft and propulsion systems. GE will invest $300 million in Beta, and the two will team up on developing a hybrid electric turbogenerator.
GE stock is up nearly 40% from its May breakout at 214.21, so investors who bought around that level should take some profits. But the stock is now finding support at the 10-week moving average, creating a new entry. It also cleared a three-weeks-tight pattern with a 286.91 entry.
Of 20 analysts who cover the jet engine maker, 75% have buy or outperform ratings. Analysts expect full-year EPS to climb 28.3% to $5.90 a share.
Comfort Systems Earnings
Comfort Systems has posted accelerating EPS gains of 49%, 60%, 67% and 75% the past four quarters, sending its EPS Rating to 99. That's the highest in IBD's air conditioning and heating products industry group. Comfort Systems also has the highest Composite Rating in its industry group, at 99.
Of 10 analysts covering the company, seven have top recommendations and the rest have hold ratings. A D.A. Davidson analyst has called Comfort Systems a "Best of Breed" rating. For the full year, analysts' consensus earnings estimate is $23.22 a share on a non-GAAP basis, up 59%.
Comfort Systems' backlog is swelling thanks largely to demand for data centers, which require massive cooling.
In its most recent earnings report, Comfort Systems reported a backlog of $8.124 billion, up 35% from $5.994 billion last year, $5.517 billion in 2023, and $4.064 billion in 2022. The backlog was no higher than $2 billion from 2010 to 2020, and it's been ballooning since AI apps led to more construction of data centers.
The stock is trading at all-time highs after gapping up following its July 24 earnings report. It cleared a four-weeks-tight pattern with a 733.25 buy point.
Celestica Leads Industry Group
Celestica is the No. 1 stock in the contract manufacturing industry group with best-possible Composite and EPS Ratings of 99.
The Toronto-based company reported EPS gains of 86%, 44%, 45% and 54% the past four quarters. Sales increased 19% to 22% over the same period.
There's heavy demand for Celestica's rack integration services for data centers and the connectivity gear that handles AI workloads. The company is a key supplier for hyperscalers such as Alphabet and Meta Platforms.
The stock is trading near all-time highs after it found support in a pullback to the 10-week moving average a few weeks ago. Shares are now extended.
The company will release third-quarter financials on Oct. 27 after the close, one day before its investor and analyst day.
Sixteen of the 19 analysts covering Celestica have buy ratings. The consensus EPS estimate for this year is $7.66, an increase of 37%.
Shopify Stock
Shopify has an EPS Rating of 95, following earnings gains of 50%, 29%, 25% and 35% the past four quarters. Sales climbed 26%, 31%, 27% and 31%.
Shopify has a Composite Rating of 96, the second highest of 121 stocks in the enterprise software industry group. Only Palantir has a higher rating.
Canada-based Shopify provides cloud software to help companies sell online.
The stock shot up 22% after its most recent earnings report, which beat analysts' expectations. Shopify's current-quarter sales outlook was above estimates, too.
Growth in Europe helped the company increase gross merchandise volume from merchant customers by 30% to $87.84 billion. Enterprise customers also contributed to the strong quarter as the company added major clients in Q2, including Starbucks.
Last week, the company's chief operating officer, Kaz Nejatian, left the company to become CEO of real estate website Opendoor Technologies.
The stock is forming a flat base with a 156.85 buy point. On the weekly chart, Shopify has formed a three-weeks-tight pattern with a 153.32 buy point, although 144 seemed to be an acceptable entry.
Of more than 53 analysts who cover Shopify, 60% have the highest ratings. Only one has a sell rating. The consensus EPS estimate for this year is $1.99, up 13.6%.
Universe of S&P 500, S&P 400 and S&P 600 Stocks
To select companies for this list, IBD used a combination of FactSet data and IBD ratings.
The screening began with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. This index is a good representation of the U.S. stock market while eliminating less-liquid and lower-quality names.
The next layer of screening flagged companies showing FactSet consensus ratings of overweight or buy, the most bullish views. To further refine the list, we screened for stocks with strong analyst consensus earnings growth estimates for the current fiscal year. In the final cut, we selected stocks with high Composite Rating and Relative Strength Ratings.
The final seven best stocks for outstanding earnings growth and estimates overlap with some Magnificent Seven stocks.
To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.
