Embrace the Bullish Wave: Top 3 Stocks to Ride High

By: Alex Freidmen

When stocks ascend towards or touch their 52-week peaks, it signifies a robustly bullish market with buyers dominating the scene. Such stocks often go on to achieve even greater highs, especially when optimistic earnings estimates from analysts keep pouring in.

That’s precisely what’s happening with Arista Networks (ANET), Datadog (DDOG), and Walmart (WMT), all of which currently hold a Zacks Rank and are hovering near their yearly peaks. Let’s delve deeper into the reasons behind this bullish surge.

Discover AI Boom at Arista Networks

Following its recent quarterly report, Arista Networks revised its revenue growth guidance for the current fiscal year (FY24), causing its stock to skyrocket post-earnings. The company specializes in cloud networking solutions for data centers and cloud computing environments, offering investors a gateway to immerse in the AI craze.

Arista Networks boasts a Zacks Rank #1 (Strong Buy), reflecting positive forecasts driven by robust business demand. The company has shown impressive sales growth, with Q1 revenue hitting $1.5 billion, marking a 16% increase from the same period last year.

Growth prospects remain robust, with consensus estimates predicting a 14% growth in earnings and sales for the current fiscal year. The growth momentum is expected to spill over into the next year, with estimates hinting at a 12% surge in earnings and a 15% increase in sales.

Datadog’s Unwavering Growth Trajectory

Datadog, also holding a Zacks Rank #1 (Strong Buy), operates as a monitoring and analytics platform catering to developers, IT operations teams, and business users in the era of cloud computing. Analysts have consistently raised their earnings projections.

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The company’s stellar quarterly performance cannot be ignored, surpassing our consensus EPS estimate by an average of 23% in the last four releases. Datadog has maintained impressive revenue growth, registering double-digit year-over-year sales growth rates in each of its past ten quarters.

Walmart’s Momentous Split and Growth

Retail behemoth Walmart executed a 3-for-1 split this year, with shares trading on a split-adjusted basis since February 26. The stock holds a Zacks Rank #1 (Strong Buy), with a markedly positive revision trend for the current fiscal year.

In its latest report, Walmart outperformed expectations by 15% on EPS and reported sales 1.3% higher than anticipated. Earnings witnessed a 22% year-over-year growth, while sales rose by 6% from the corresponding period last year.

The Stock Ride Continues

Stocks hitting new highs often have the potential to climb even higher, especially when backed by positive earnings estimate revisions. This is precisely the trajectory that Arista Networks (ANET), Datadog (DDOG), and Walmart (WMT) are currently on, with each boasting a favorable Zacks Rank and near 52-week high trades.