Artificial Intelligence Plays Lead 5 Stocks Near Buy Points

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Artificial Intelligence Plays Lead 5 Stocks Near Buy Points

July 01, 2023

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Visa stock and Marriott International (MAR) broke out on Friday as travel demand surges ahead of the summer vacation season. Artificial intelligence plays Marvell Technology (MRVL) and MongoDB (MDB) also make this week's list, along with fast-casual restaurant giant Chipotle Mexican Grill (CMG).

MDB stock is on IBD Leaderboard, while Chipotle is on the Leaderboard watchlist. MongoDB and CMG stock also are on the IBD 50.

Marvell Technology

Santa Clara, Calif.-based chipmaker Marvell rocketed at the end of May on expectations AI will be a major growth driver.

The company topped Q1 estimates for its May 25 results, reporting adjusted earnings of 31 cents per share on $1.32 billion in revenue.

MRVL stock broke out of a consolidation after Marvell guided its AI chip business to grow to $800 million, or 15% of sales, next year compared to $200 million, or 3% of sales last year. The company also sees its AI sales doubling this year and next year.

MRVL gapped up on earnings and has largely held that gap, finding support at its 21-day exponential moving average. A move above Thursday's high of 60.43 would offer an early entry from breaking a downtrend while still near the 21-day line

Marvell needs another week to form a proper base.

Shares have an 87 Composite Rating, which combines various technical indicators into one easy-to-read score. Marvell's relative strength line is off May 26 highs and it has a 93 RS Rating. Despite topping forecasts, the company reported accelerating earnings declines the past two quarters, giving it a 57 EPS Rating.

MongoDB

New York-based MongoDB provides an open-source database platform for businesses and operates on a subscription-based, software-as-a-service business model.

On June 2, MongoDB soared 28% after the company reported a 180% surge in quarterly profit to 56 cents a share vs. the year-ago period. Revenue increased 29% to $368.3 million.

And Analysts expect earnings to ramp up again, forecasting a 92% jump to $1.56 per share for fiscal 2024 and 34% growth in fiscal 2025.

Tigress Financial raised its price target on MDB stock Wednesday to $490 from $365 and maintained a buy rating on its shares. The firm noted that the increasing integration of AI tools and capabilities should provide significant upside to MongoDB's customer penetration, revenue growth and enterprise adoption.

MongoDB leads the Computer Software-Database Group, according to the IBD Stock Checkup. MDB stock is on the IBD 50 list and Leaderboard list.

MongoDB stock cleared a three-weeks-tight pattern after a big gap-up following its June 2 earnings. Shares eclipsed the 398.89 buy point during the week. MongoDB's buy zone stretches to 418.83.

MDB stock has a perfect 99 Composite Rating and strong 83 EPS Rating. MongoDB's relative strength line is at 52-week highs and it has a 97 RS Rating.

Marriott International

Hotel stocks are trying to join the recent cruise lines and airlines rally as travel demand ramps up for summer vacation.

As of early April, 53% of all Americans and 81% of leisure travelers planned trips in the next six months, the U.S. Travel Association noted on June 2. And 26% of Americans plan to increase spending on leisure travel in the next three months, compared to 19% in Q1.

Meanwhile, the hotel industry is off to a strong start this year. In the first quarter of 2023, U.S. hotels exceeded pre-pandemic (Q1 2019) revenue-per-available-room levels by 13%, PricewaterhouseCoopers reported in May.

Marriott International (MAR) is reaping the benefits, averaging a 79.25% spike in earnings the past four quarters on an average 43% jump in revenue.

MAR stock broke out on Friday after just topping the 183.27 buy point for its flat base. The current buy zone, which stretches 5% beyond the buy point, extends to 192.43.

Marriott ranks 2nd in the Leisure-Lodging Group according to the IBD Stock Checkup

Marriott stock has a 92 Composite Rating, 78 EPS Rating and an 85 RS Rating.

Visa Stock

Dow Jones payments processing giant Visa (V) was the IBD Stock Of The Day Thursday. Visa, which makes money on credit and debit transaction fees and cross-border payments, is humming on strong U.S. consumer spending and overseas travel.

Visa said that cross-border payments grew 17% from a year ago in May, compared with 5% growth in the U.S. The company averaged 22.3% earnings growth and 15.3% revenue growth the past four quarters.

On Wednesday, Visa announced it acquired Brazilian payments infrastructure startup Pismo for $1 billion in cash.

Visa stock broke out of its own flat base on Friday after bounding above its 235.57 buy point. V shares made a strong push above their 50-day moving average on Thursday, offering an early entry.

Rival Mastercard (MA) is also actionable on a similar chart. Shares surpassed their 392.20 flat-base buy point on Friday as well.

Visa stock has a 93 Composite Rating and EPS Rating, as well as a 79 RS Rating.

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Chipotle Mexican Grill

Newport Beach, Calif.-based Chipotle Mexican Grill (CMG) is a member of the IBD 50 list and on the Leaderboard watchlist. CMG stock also leads the Retail-Restaurants group, according to the IBD Stock Checkup.

Chipotle's earnings growth accelerated the last four quarters, reporting an 84% spike to $10.50 per share in Q1 2023. The company also averaged 15% quarterly sales growth during that period.

CMG stock rebounded from the 21-day and 10-week lines, offering early entries before closing just below the official buy point of 2,139.88 on Friday.

Chipotle stock has a perfect 99 Composite Rating and 99 EPS Rating. CMG's relative strength line is off highs from early May and it has a 93 RS Rating.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison

Artificial Intelligence Plays Lead 5 Stocks Near Buy Points

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