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5 Stocks to Buy as S&P 500's Bull Run Continues

The S&P 500 has been on an incredible run, achieving the 30th record close of the year. The ongoing artificial intelligence (AI) craze, rate cut bets and strong corporate profit growth have been fueling investors' confidence in the stock market. In particular, the "Magnificent Seven" is the biggest engine of growth for the S&P 500 as a whole, accounting for 31% of the weightage in the index.

The solid trend is likely to continue for the rest of the year as the tech-fueled rally has made Wall Street analysts even more bullish. Investors seeking to tap the ongoing rally should consider stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy), a Growth Score of B or better, and double-digit expected earnings growth for the current fiscal year. Some such stocks are NVIDIA Corporation NVDA, Vistra Energy Corp. VST, Micron Technology MU, Amphenol APH and Walmart Inc. WMT. You can see the complete list of today’s Zacks #1 Rank stocks here.

Solid Market Trends

Inflation in the United States cooled down in May for the second consecutive month. The Consumer Price Index rose 3.3% year over year in May, down from an annual growth of 3.4% in April. On a monthly basis, prices were flat for the first time since July 2022. Easing inflation indicates that the economy is stabilizing, and interest rates may be declining.

In the latest FOMC meeting, U.S. policymakers penciled in just one rate cut for this year and projected four cuts for 2025. The Fed altered language in its statement, noting there has been “modest further progress toward the committee’s 2% inflation objective.” Previously, the statement pointed to a “lack” of further progress. Low rates reduce the cost of borrowing, often needed to finance the expansion of companies, thereby driving growth in the economy. It typically reduces the attractiveness of fixed-income investments like bonds, leading investors to seek higher returns in the equity markets.

Bullish Wall Street

An analyst at Goldman boosted the year-end target price to 5,600 from 5,200 for the S&P 500 Index for a third time, citing an optimistic outlook for earnings growth and the U.S. economy. Meanwhile, Evercore ISI, one of the prominent bear analysts, turned bullish and expects the stock market to rise another 10% by the end of the year. It raised its year-end S&P 500 price target from 4,750 to 6,000 — a new high on Wall Street. The analyst stated the "AI revolution is in the early innings" and that should lead to continued strength in earnings growth. Evercore ISI forecasts S&P 500 EPS growth of 8% and 5% in 2024 and 2025, respectively.

Stocks to Buy

NVIDIA is the worldwide leader in visual computing technologies and the inventor of graphic processing units. The stock saw a solid earnings estimate revision of 27 cents for the fiscal year ending January 2025 over the past month and has an estimated growth rate of 106.1%.

NVIDIA sports a Zacks Rank #1 and has a Growth Score of A.

Vistra Energy is an energy company that offers electricity and power generation, distribution and transmission solutions. The stock saw a solid earnings estimate revision of 47 cents for this year over the past 30 days, with an estimated growth rate of 13.6%.

Vistra Energy flaunts a Zacks Rank #1 and has a Growth Score of B.

Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The stock saw a positive earnings estimate revision of 5 cents for the fiscal year (ending August 2024) and has an expected earnings growth rate of 119.1%.

Micron Technology has a Zacks Rank #2 and a Growth Score of B.

Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. The stock saw a positive earnings estimate revision of a couple of cents for this year and has an expected earnings growth rate of 11.9%.

APH has a Zacks Rank #2 and a solid Growth Score of A.

Walmart has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. It is engaged in the operation of retail, wholesale and other units worldwide. Walmart saw a positive earnings estimate revision of 6 cents for this year and has an expected earnings growth rate of 9%.

The stock has a Zacks Rank #2 and a Growth Score of B.

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Vistra Corp. (VST) : Free Stock Analysis Report

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