Are you ready for “the year of the stock picker”? Goldman Sachs certainly thinks so. The firm is highlighting equities that the options market is signaling could be poised for sharp moves after the release of quarterly reports. With options prices rising in reaction to geopolitical events and the anticipation of seasonally high earnings volatility, there is a potential for relief rallies for stocks on their respective earnings events.
Analysts expect an earnings growth rate for the S&P 500 of 4.2% in the third quarter, marking a fifth straight period of year-over-year growth. Here at Extreme Investor Network, we have some top trade ideas heading into earnings season that you won’t want to miss.
One stock on our radar is Gap. Analyst Brooke Roach forecasts a 55% upside for Gap stock, driven by market share growth and improvement in both its merchandise margins and profitability over the next year. With an earnings forecast higher than consensus outlooks on Wall Street, Gap is coming off a strong second-quarter earnings beat. Goldman recommends buying calls on Gap stock with a $21 strike for the December term.
Nvidia is another stock to watch, with analyst Toshiya Hari forecasting roughly a 6% upside for shares of the artificial intelligence darling due to continued robust data center demand. Hari expresses confidence in Nvidia’s ability to set the industry standard for the foreseeable future. Goldman suggests investors purchase calls on Nvidia with a $135 strike for the December term.
In addition to Gap and Nvidia, other stocks on our watchlist include chipmaker Broadcom and medical device manufacturer Boston Scientific. Stay tuned to Extreme Investor Network for more insights and trade ideas as we navigate through this exciting earnings season. Get ready to make the most of “the year of the stock picker” with us.