Broadcom, Goldman Sachs lead 5 stocks into buy zone on bullish basis
Broadcom (AVGO) and Goldman Sachs (GS) tops the list of five stocks on this weekend's watch list that are trading above traditional or early buy points, all of which have developed flat bases that indicate resilience in a volatile market. In addition to AVGO and GS, the list also includes two AI-powered enterprise software Immediate service (now) and Excellent Service Holdings, Inc. (EXLS), and pipeline operators energy transfer (Eastern Time).
With fourth-quarter earnings season in full swing, Trump's rally has gained ground over the past week, with Goldman Sachs and Energy Transfer already posting breakouts on the back of easing inflation data, while Broadcom stock, ServiceNow and EXLS have flashed Early entry opportunities.
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Both Broadcom and ExlService stocks are part of IBD's 50 flagship list of leading growth stocks. SwingTrader has taken positions in ServiceNow stock, Goldman Sachs, Broadcom, and the Global X MLP and Energy Infrastructure ETF (MLPX), which lists ET as one of its top holdings.
Be sure to read IBD's Big Picture column after each trading day to get the latest on current stock market trends and what they mean for your trading decisions.
Broadcom Stock
Broadcom is Thursday's IBD Stock of the Day, and the stock has been flat for five consecutive weeks since its fourth-quarter earnings report on Dec. 12. The upside is modest, but reaction to Broadcom's prospects has been explosive, with AI-driven revenue expected to reach $60 billion to $90 billion in 2027 from its three largest custom chip customers.
Broadcom's earnings and revenue growth have accelerated in consecutive quarters, contributing to its IBD Composite Rating of 99, according to IBD Stock Checkup. Ratings consider both fundamental and technical data.
SwingTrader opened a position in AVGO on Thursday, regaining the 21-day index moving average and breaking the short-term downward trend, providing an early entry opportunity. Broadcom rose 5.85% this week to 237.44 points, with an official buying point of 251.88 points.
Goldman Sachs Stock
Goldman Sachs gapped above its 50-day moving average and early entry point on Wednesday, reporting fourth-quarter earnings of $11.95 per share, an increase of 118% from the same period last year and exceeding expectations of $3.74.
Morgan Stanley raised its GS price target from 736 points to 782 points, citing “the firm belief that we are in the early stages of a multi-year capital markets cycle.” Morgan Stanley sees Goldman Sachs as the stock with the broadest exposure and predicts “more blowout quarters in 2025.”
Goldman Sachs shares rose 11.8% this week to 625.94 points. The stock price broke through the 612.73 buy point. The buy zone runs through 643.37.
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Immediate service inventory
ServiceNow is the IBD stock of the day on Friday. The Santa Clara, Calif.-based company's cloud-based software platform automates IT processes, integrates with other enterprise software platforms and provides analytics to make informed decisions.
As traditional providers struggle to cope with increasingly complex IT environments, ServiceNow has expanded its addressable market by $54 billion into adjacent markets, Truist analyst Joel Fishbein wrote in a Dec. 12 report. On December 10, Cowen analyst Derrick Wood raised the NOW target price from 1,025 points to 1,300 points, saying that the company is in the early stages of a strong artificial intelligence product cycle, and two more data-centric products will be launched early this year. release.
NOW rose 4.6% for the week to 1,071.48, ending the week just above its 10-week and 50-day moving averages. It's time to take action on a bearish breakout from the Dec. 11 high, but look for a more convincing move above the 10-week line.
ServiceNow is scheduled to release its next earnings report on January 29.
In a recent interview with IBD, CEO Bill McDermott discussed ServiceNow's Artificial Intelligence Strategy.
Exl service inventory
ExlService was named an IBD Stock of the Day on December 18, and the stock has since moved higher. The company provides data management solutions to the insurance, healthcare, banking, and more industries and is currently leveraging its industry-specific knowledge to deliver tailor-made solutions that provide AI-driven analytics to clients.
One example is ExlService's insurance LLM, the large language model. It's “specifically designed to handle the nuances of automotive personal injury, workers' compensation and general liability claims,” CEO Rohit Kapoor said during a third-quarter earnings call on Oct. 30. The model is already “live” at a large casualty and life insurance company in the United States, as well as a regional casualty insurance company, he added.
After the third-quarter report was released, William Blair analyst Jesse Wilson noted that deals exceeding $25 million were up more than 25% from a year ago, adding that AI-related deals should increase gross margins.
EXLS shares rose 2.5% to $46.25 on Monday, breaking above the 50-day moving average and entering the market early. The stock ended the week up 4.5% at $47.15. The stock closed just below its 47.37 buy point on a six-week flat basis after breaking above that level during the session on Friday.
Earnings are expected around February 27, according to FactSet.
energy transfer inventory
Energy Transfer operates more than 130,000 miles of pipelines and related energy infrastructure in 44 states, transporting crude oil, natural gas and fractionating natural gas liquids into different products.
On Dec. 6, Energy Transfer said it would begin construction of an intrastate natural gas pipeline that would connect the Permian Basin to major markets and trading centers to meet growing demand. On December 19, the company signed a 20-year agreement to supply Chevron with 2 million tons of liquefied natural gas (LNG) per year.
Bank of America raised Energy Transfer's price target from 20 points to 23 points on January 10, maintaining a buy rating. The company ranks ET as the most popular midstream name in 2025, highlighting three factors driving the group: increased natural gas and liquids growth in the Permian; and the belief that natural gas's reliability and speed to market make it a prime candidate for data center expansion Reasonable Choice; and the LNG rally following the election of Donald Trump.
ET rose 4.5% to 20.29 last week, clearing a 20.02 buy point on a six-week flat basis. The buy zone runs through 21.02.
ET is scheduled to report on February 11.
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