Advanced Micro Devices (AMD) leads this week’s stocks to watch near buy points as AMD stock rocketed 37% so far this year. Cloud computing giant Arista Networks (ANET) is pausing as it turns to artificial intelligence to drive growth. Lattice Semiconductor, Scorpio Tankers and SPS Commerce also make the list as they find support with earnings season in full swing.
Stocks on this week’s list are all pulling back or finding support at their 10-week moving averages. Bullish rebounds from the 10-week line can offer buying opportunities. However, a decisive break below the 10-week line would be a significant sell signal.
The market is in a confirmed uptrend, meaning investors should increase exposure moderately. But they should remain cautious as a surprise earnings miss could stifle any momentum.
Semiconductor maker Advanced Micro Devices (AMD) was the IBD Stock Of The Day for Thursday.
The Santa Clara, Calif.-based chip leader round-tripped its solid gain from the March 15 breakout from its flat base. AMD stock is back near the 89.04 buy point and hovering on its 10-week and 50-day moving averages.
A break in its current downtrend would offer an early entry.
AMD reports earnings late May 2. Analysts polled by FactSet expect AMD earnings to halve to 56 cents per share on a 16% revenue decline to $5.31 billion. That would mark three quarters of accelerating earnings declines in a row. Intel (INTC), which competes with AMD in some areas, reports on Thursday.
Analysts expect AMD and rival Nvidia (NVDA) to benefit from the AI boom as they develop the hardware. On April 10, KeyBanc analyst John Vinh noted that, “while cloud demand is slowing, the increasing mix of AI server projects is benefiting Nvidia and AMD.”
AMD stock has a near perfect 98 Composite Rating out of a best possible 99. The Composite Rating combines a number of technical indicators into one easy-to-read score. AMD stock has a strong 93 RS Rating and 80 EPS Rating.
Cloud networking giant Arista Networks boasts tech titans Meta Platforms (META) and Microsoft (MSFT) among its clientele. ANET stock shot up 28% so far this year as artificial intelligence became the hottest investing topic following the arrival of ChatGPT and OpenAI. Arista management believes AI will drive increased network traffic as its customers explore incorporating the technology.
For its quarterly results May 1, analysts expect earnings to rocket 60.7% to $1.35 per share on a nearly 50% spike in revenue to $1.3 billion. Microsoft and Meta both report next week. Their guidance and spending plans could be key for ANET stock.
ANET stock dipped three of the last four weeks after breaking out of its cup base on Feb. 17. Shares are trading just above its 10-week moving average of 153.97. The stock would need to post a strong gain to be actionable, potentially clearing its Tuesday high of 165.75. It’s possible Arista Networks will forge a new base.
Arista leads the Computer-Networking Group according to the IBD Stock Checkup. ANET stock has a perfect 99 Composite Rating. It has a 96 RS Rating, with its relative strength line off recent highs. Arista has a 98 EPS Rating.
LSCC stock briefly undercut its 10-week and 50-day moving averages on Friday, but finished the week above those levels. That’s after rallying more than 50% following its Jan. 24 breakout from its cup-with-handle base. Shares could possibly form a flat base in another week. A push above this week’s high of 96.17 could offer investors early entry.
For its May 1 earnings, analysts forecast Lattice to report a 35% EPS leap to 50 cents per share on 19.6% revenue growth to $180 million. Following the company’s Q4 earnings beat, Lattice guided revenue between $175 million to $185 million.
Lattice Semiconductor leads the Elec-Semiconductor Fabless Group according to the IBD Stock Checkup.
LSCC stock has a perfect 99 Composite Rating and 99 EPS Rating. It’s relative strength line is at highs with a 97 RS Rating.
Monaco-based Scorpio Tankers (STNG) is a worldwide shipper of oil and petroleum. It has one of the largest tanker fleets in the world with 113 vessels on the water as of year-end and it purchased six more ships last week.
The company averaged 192% revenue growth over the past four quarters and posted massive earnings gains the past three quarters after recording losses in 2021.
Scorpio Tankers reports earnings May 2. Analysts expect EPS to catapult to $3.26, compared to an adjusted loss of 27 cents last year. Revenue is seen rocketing 125% to $387 million.
STNG stock reclaimed its 50-day line on April 17, flashing an aggressive entry, but ended the week back below that level. Shares are consolidating with a 64.30 buy point according to MarketSmith. STNG stock could forge a handle in a few days. Technically, it already has a handle on a weekly chart, offering a lower entry at 62.
STNG stock has a 94 Composite Rating, a 97 RS Rating and a 78 EPS Rating.
Supply chain management software provider SPS Commerce (SPSC) provides cloud-based solutions for retailers and logistics firms. SPSC stock is up nearly 19% so far this year after breaking out from a cup base in early February.
And the company reported accelerating earnings and revenue growth the past two quarters. However, that trend is unlikely to continue as analysts expect SPS Commerce to announce 5.5% earnings growth to 58 cents per share for its Q1 results Wednesday. Revenue gains are also expected to slow to 17% growth as analysts forecast sales of $124 million.
SPSC stock has been finding support around its 21-day exponential moving average and 10-week line for the past several weeks. It’s currently trading in a flat base with a 157.56 buy point as shown in MarketSmith. A potential early entry point could be found around 154, with a lot of resistance at that level. Investors likely should refrain from opening a position prior to earnings.
SPSC stock leads the Computer Software-Specialty Enterprise Group according to the IBD Stock Checkup. SPS Commerce is flashing positive indicators across the board. SPSC stock has a 99 Composite Rating, 98 EPS Rating and 90 RS Rating.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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