As earnings season heats up, Bank of America’s latest analyst insights spotlight a compelling lineup of companies poised to outperform, offering savvy investors a roadmap to potential gains. Beyond the usual suspects, the firm highlights a blend of tech innovators and consumer staples that are not just riding current trends but shaping the future landscape. Let’s dive deeper into these picks and unpack what makes them stand out—and more importantly, what investors should do now.
Oddity Tech (Ticker: ODD): Beauty Meets Innovation
Oddity Tech is a prime example of how direct-to-consumer (DTC) models combined with cutting-edge digital platforms can create a formidable growth engine. Bank of America’s analyst Anna Lizzul raised her price target from $68 to $80 ahead of Oddity’s August earnings report, citing the company’s “innovative” digital offerings and strategic positioning in the booming online beauty market. With shares up 64% year-to-date, Oddity isn’t just riding a wave—it’s helping create it.
What’s unique here? Oddity’s proprietary tech that personalizes product recommendations taps into a broader trend: consumers increasingly prefer online shopping for beauty products, driven by convenience and customization. This shift is accelerating, with eMarketer projecting global beauty e-commerce sales to surpass $100 billion by 2025, growing at a double-digit CAGR.
Investor takeaway: Advisors should consider increasing exposure to companies like Oddity that leverage tech to deepen consumer engagement in high-growth sectors. For investors, this means looking beyond traditional beauty brands and focusing on tech-enabled platforms that own the customer relationship.
Bilibili (Ticker: BILI): China’s AI-Enhanced Entertainment Powerhouse
Bilibili, the China-based online video platform, continues to impress with its multi-faceted growth strategy. Analyst Miranda Zhuang raised the price target to $27, highlighting management’s focus on high-quality content, AI-driven monetization, and long-lifecycle gaming. Shares have climbed 28% this year, reflecting growing investor confidence.
The unique angle? Bilibili is capitalizing on AI to optimize content delivery and ad monetization—an area where many platforms are still nascent. According to McKinsey, AI could add $1.4 trillion to the global media industry by 2030 through enhanced personalization and efficiency.
Investor takeaway: Investors should watch for companies integrating AI deeply into content ecosystems, as this is a clear competitive moat. Advisors might consider Bilibili as a growth play with a long runway, especially given China’s large and digitally savvy user base.
Anheuser-Busch InBev (Ticker: BUD): Reliable Staple with a Twist
Despite some volume headwinds in key markets like China and the US, Anheuser-Busch InBev is expected to deliver margin expansion and solid organic EBITDA growth (+5.6%), driven by operational efficiencies and strategic share buybacks. Shares have surged nearly 40% this year, underscoring the market’s appreciation for its reliable cash flow and disciplined capital return strategy.
What’s notable? ABI’s ability to maintain margin growth in a challenging volume environment highlights its pricing power and cost control—traits that are gold in the current inflationary climate. Moreover, ABI’s share buyback program signals management’s confidence and commitment to shareholder value.
Investor takeaway: For conservative portfolios, ABI remains a top pick among staples. Advisors should emphasize its role as a defensive compounder with upside in a volatile macroeconomic environment.
AppLovin (Ticker: APP): The Under-the-Radar Ad Tech Giant
Bank of America ranks AppLovin as a top pick with significant upside potential in EBITDA by 2026, driven by both managed service onboarding and a ramp-up in self-serve advertising. This dual growth engine is often underestimated by investors, suggesting room for upward revisions after upcoming earnings.
The broader context? Digital advertising continues to grow robustly, projected by eMarketer to reach $700 billion globally by 2025. AppLovin’s scalable platform positions it well to capture a meaningful slice of this expanding pie.
Investor takeaway: Growth investors should monitor AppLovin closely, especially for signs of accelerating ad spend recovery and platform adoption. Advisors might consider adding exposure in thematic portfolios focused on digital advertising innovation.
Amazon (Ticker: AMZN): The Evergreen E-Commerce and Cloud Titan
Amazon remains a cornerstone in the tech ecosystem, with expected retail beats and AWS growth driving optimism for the second half of the year. Bank of America highlights Amazon’s customer-centric approach as a key competitive advantage, positioning it to capitalize on secular trends like e-commerce globalization, cloud computing, and online advertising.
A fresh statistic to consider: AWS alone accounted for about 16% of Amazon’s revenue but contributed over 60% of operating income in recent quarters, underscoring the profitability of its cloud segment.
Investor takeaway: Amazon’s diversified growth engines make it a must-have for long-term portfolios. Advisors should emphasize its resilience and innovation in client-focused services as reasons to hold or accumulate shares during market dips.
What’s Next for Investors and Advisors?
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Embrace Tech-Enabled Consumer Shifts: Companies like Oddity Tech and Bilibili are not just beneficiaries but architects of changing consumer behaviors driven by technology. Investors should prioritize firms with strong digital moats and AI integration.
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Balance Growth with Stability: While tech stocks offer growth, staples like ABI provide reliable income and defensive qualities. A balanced approach can mitigate volatility while capturing upside.
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Watch for Earnings Surprises: With multiple catalysts ahead—earnings reports, AI advancements, and share buybacks—investors should stay nimble and ready to adjust positions based on fresh data.
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Leverage Thematic Investing: Digital advertising, cloud computing, and e-commerce remain powerful secular trends. Allocating capital to leaders in these spaces can yield outsized returns over the next 3-5 years.
In a market where innovation meets resilience, these insights from Bank of America offer a strategic blueprint. At Extreme Investor Network, we believe the key to outperformance lies in identifying companies that combine robust fundamentals with forward-looking catalysts. Now is the time to position portfolios accordingly and stay ahead of the curve.
Sources:
- Bank of America Analyst Reports, July 2024
- eMarketer Global E-commerce and Digital Ad Spend Forecasts, 2024
- McKinsey & Company, “The Next Wave of AI in Media,” 2023
- Amazon Q1 2024 Earnings Report
For investors and advisors seeking to refine their strategies, these companies represent both opportunity and insight in the evolving market landscape. Stay tuned for more exclusive analysis from Extreme Investor Network.
Source: Five stocks have more room to run ahead of earnings