Buying stocks can be straightforward, but selecting the right ones without a solid, proven strategy is exceptionally challenging. So, what are the best stocks to consider buying now or adding to your watchlist? Companies like Fiserv (FI), Axon Enterprise (AXON), TJX (TJX), Bank of America (BAC), and Royal Caribbean (RCL) stand out as strong possibilities.
The market has been surprisingly resilient, outperforming expectations in 2023 and continuing into 2024. The election victory of Donald Trump initially gave stocks a boost. However, investors are now carefully evaluating the potential impacts of his policies, such as tariffs, as we progress further into 2025. Adding to the complexity, the Federal Reserve is signaling fewer interest rate cuts than previously anticipated, influenced by the persistent strength of the labor market.
Best Stocks To Buy: Essential Criteria
It’s important to remember that thousands of stocks are traded on the NYSE and Nasdaq. To achieve significant returns, your goal should be to identify the very best stocks available right now.
The IBD Methodology provides a robust framework for identifying these top stocks. A key principle is to invest in companies demonstrating strong recent growth, specifically looking for quarterly and annual earnings growth of at least 25%. Innovation is another crucial factor; prioritize companies launching new, potentially transformative products and services. Don’t overlook emerging companies, especially recent IPOs, that might not yet be profitable but are achieving substantial revenue growth.
Adopting such a focused approach can give you a distinct advantage over simply mirroring the performance of the S&P 500 benchmark. Consistently outperforming this benchmark is essential for building exceptional long-term investment returns.
Further refine your stock selection by monitoring supply and demand dynamics for individual stocks. Focus on leading stocks within the strongest industry sectors, and favor stocks that attract strong backing from institutional investors.
Once you’ve identified a stock that meets these fundamental criteria, the next step is to analyze stock charts to pinpoint an optimal entry point. Patiently wait for a stock to establish a base and then consider buying as it approaches a buy point, ideally accompanied by high trading volume. Often, a stock reaches a valid buy point when it surpasses the initial high point on the left side of its base pattern. For a deeper understanding of base patterns and how stock charts can be instrumental in achieving substantial stock market gains, explore resources on trading stocks using base patterns.
The Importance of Market Direction in Stock Buying
A critical element of successful investing is diligently tracking the overall market direction. The majority of stocks, even those with the strongest fundamentals, tend to move in alignment with the broader market trends. It’s generally wise to invest when the stock market is in a confirmed uptrend and to shift to a cash position when the market enters a correction phase.
In both 2023 and 2024, the stock market delivered impressive gains. Major indexes climbed to record highs following Donald Trump’s presidential victory. However, recent more conservative signals from the Federal Reserve regarding future interest rate policies are currently exerting some downward pressure on stocks.
While the stock market has retreated from recent peaks, it is showing signs of resilience. The S&P 500 has successfully rebounded past its 50-day moving average, and the Nasdaq composite has also recently climbed back above this important benchmark.
In the current environment, investors should focus on identifying and buying high-quality stocks with robust growth potential. The stocks highlighted below represent some of the best candidates for purchase or close monitoring. The IBD 50 list is another valuable resource for identifying promising stocks.
Nevertheless, it’s equally important to be vigilant about sell signals. A general rule is to sell any stock that declines by 7% or 8% below your purchase price to limit potential losses. Also, be wary of significant drops below the 50-day or 10-week moving average lines, as these can indicate the end of a stock’s upward trend.
The stock market is dynamic and can change rapidly. It’s essential to stay informed by regularly monitoring the market trend page for the latest updates and shifts.
Top Stocks To Consider Buying or Watching
Here’s a list of stocks that look promising for investors right now:
- Fiserv
- Axon Enterprise
- TJX
- Bank of America
- Royal Caribbean
Let’s delve deeper into each of these stocks: Fiserv, Axon Enterprise, TJX, Bank of America, and Royal Caribbean. A key characteristic they share is strong relative strength, indicating they are outperforming the market.
Fiserv Stock Analysis
Fiserv (FI), a payments processing company, is currently in a buyable range, having moved above a cup-base entry point at 223.23. The 5% buy zone extends up to 234.39.
MarketSurge analysis indicates that Fiserv’s stock price has climbed above its 50-day moving average and is also trading above its short-term moving averages, which are positive bullish signals.
The relative strength line for Fiserv is showing renewed upward momentum after a period of consolidation. This relative strength line is a measure of a stock’s performance compared to the broader S&P 500 index.
So far in 2025, Fiserv is outperforming the market, with its stock price already up nearly 13%.
Fiserv demonstrates strong overall performance, reflected in its impressive IBD Composite Rating of 95 out of a maximum 99.
As a global fintech and payments leader, Fiserv offers a wide range of solutions across banking, global commerce, merchant services, and billing and payment processing.
Earnings strength is a key factor in stock evaluation, and Fiserv excels here with an EPS Rating of 94 out of 99.
Over the past three quarters, Fiserv’s earnings have grown by an average of 17%. While robust, this is slightly below the 25% earnings growth benchmark favored by investors who follow The IBD Methodology.
In its Q4 report, Fiserv posted a 15% increase in earnings per share to $2.51, with revenue reaching $4.9 billion, a 6.5% increase year-over-year. These results slightly exceeded analyst expectations of $2.48 EPS and $4.96 billion in sales.
Wall Street analysts anticipate continued strong earnings growth for Fiserv, projecting a 16% increase in EPS for fiscal year 2025, followed by an acceleration to 17% growth in 2025.
Institutional investors have been actively accumulating Fiserv stock recently. The stock’s Accumulation/Distribution Rating of B- indicates more buying than selling pressure. Currently, funds hold 55% of Fiserv’s stock, according to MarketSurge data.
Notable funds holding Fiserv shares include the highly-rated Fidelity Contrafund (FCNTX) and MFS Growth Fund (MFEGX).
Fiserv’s consistently strong performance has earned it a spot on the prestigious IBD Leaderboard, a list of top-rated stocks.
Axon Enterprise Stock Analysis
Axon Enterprise (AXON) is forming a new cup base with a potential buy point at 698.67, according to MarketSurge analysis. A handle formation is developing, which could offer a more favorable, lower entry point. A significant portion of this pattern has formed above the 50-day moving average, a positive technical sign.
Recently, Axon’s stock price has moved back above its 50-day moving average, presenting an early entry opportunity for more aggressive investors.
Furthermore, the relative strength line for Axon has recently reached new highs, another encouraging indicator. Axon’s overall performance is exceptional, reflected in its perfect IBD Composite Rating of 99.
Axon’s earnings performance is also top-tier, evidenced by its 96 EPS Rating.
Recent earnings growth has been robust, with earnings increasing by an average of 27% over the last three quarters. EPS growth even accelerated in the most recent quarter.
Analysts project continued earnings growth, forecasting a 22% increase in EPS for 2025. While strong, this is slightly below the 25% growth threshold favored by those adhering to IBD investing principles.
Institutional investors have been increasing their positions in Axon stock, contributing to an Accumulation/Distribution Rating of B.
Funds currently hold 60% of Axon’s stock, according to MarketSurge data, indicating strong institutional support.
Axon’s Product Portfolio
While Axon is best known for its TASER electroshock weapons, the Scottsdale, Arizona-based company also specializes in body-worn cameras and offers a cloud-based digital evidence management platform called Axon Evidence.
Wall Street analysts are optimistic about Axon’s future. The consensus analyst rating is “strong buy,” with an average price target of 622.92, according to TipRanks. The stock is currently trading around 614.
Raymond James managing director Brian Gesuale rates Axon as “outperform” with a price target of 645. He suggests that Axon’s recent stock pullback was due to factors such as profit-taking and caution related to challenging upcoming comparisons.
However, Gesuale anticipates significant future growth driven by artificial intelligence initiatives.
“We expect the AI era will become meaningful and measurable in (2025-26) and could produce more than $180+ million of (annual recurring revenue) and registering low double digits of the cloud mix,” he noted in a January 6 research report. “AI era is a tech game changer and extends the duration of 25%+ year-over-year ARR growth by a couple of years.”
Baird senior analyst Will Power is even more bullish, rating Axon as “overweight” with an 800 price target. In a January 18 client note, he cited “much better-than-average growth, continued strong operating momentum, a strong competitive moat and AI narrative tailwinds” as reasons for his positive outlook.
Axon’s exceptional overall performance has also earned it recognition on the IBD Leaderboard Watchlist and the Sector Leaders list.
TJX Stock Analysis
TJX (TJX), the off-price apparel and home goods retailer, is a stock to watch as it approaches a flat-base buy point of 128. For investors with a higher risk tolerance, the January 30 high of 126.48 could serve as an earlier entry point.
The relative strength line for TJX is trending upward again, although the stock price remains below its 12-month highs. The majority of the recent base pattern has formed above the 50-day moving average, a favorable sign. TJX is also trading above its short-term moving averages.
TJX recently found renewed support at its 50-day moving average line.
TJX holds an IBD Composite Rating of 91 out of 99, indicating very strong, though not perfect, overall performance.
Earnings strength is a key positive for TJX, with an EPS Rating of 88 out of 99. Over the past three quarters, TJX’s earnings have grown by an average of 15%.
TJX ranks in the top 20% of stocks in terms of price performance over the past 12 months. The stock is up nearly 4% year-to-date.
Best Stocks To Buy: TJX Backed by Top Funds
Institutional investors have been increasing their holdings in TJX stock recently, resulting in an Accumulation/Distribution Rating of A-.
Currently, funds hold 48% of TJX shares, according to MarketSurge data. The highly regarded Fidelity Contrafund (FCNTX) is among the notable institutional holders of TJX.
TJX operates well-known retail brands like TJ Maxx and Marshalls. The off-price retailer primarily sources its merchandise from other retail chains.
Gimme Credit senior analyst Carol Levenson commended TJX’s ability to generate strong revenue growth after the company surpassed sales and earnings expectations in November.
“Investors have been hearing from retailers for two years that a cautious customer was pulling back on the purchase of discretionary items in favor of essentials,” Levenson stated in a client note. “TJX flouts this trend; it sells nothing but discretionary items, primarily apparel and home fashions. Yet aside from the pandemic, when it was forced to close its stores, it has grown sales in all macro environments.”
Bank Of America Stock Analysis
Bank of America (BAC) is trading just below a cup-with-handle entry point at 47.51, as indicated by MarketSurge analysis. It is considered actionable within a 5% range above this benchmark price.
The stock has found buying support at its 50-day moving average after previously testing the buy point. A rebound from this level would be an encouraging sign for a potential breakout.
Additionally, the relative strength line for BAC has turned upwards from recent lows as the stock attempts to break out, which is a bullish signal.
BAC currently has an IBD Composite Rating of 90 out of 99. Its overall performance is strong, though not in the top tier.
Earnings performance is solid for Bank of America, with an EPS Rating of 80 out of 99. Notably, earnings have grown by an average of 40% over the past three quarters, significantly exceeding the 25% growth rate sought by followers of IBD investing principles.
In its most recent quarter, Bank of America’s earnings more than doubled to 82 cents per share, while revenue increased by 15% to $25.3 billion.
These results surpassed FactSet analyst consensus estimates of 77 cents EPS on $25.12 billion in revenue.
Net interest income for Bank of America rose 3% to $14.4 billion, primarily driven by global markets activity, fixed-rate asset repricing, and loan growth.
However, Bank of America’s provision for credit losses increased to $1.5 billion from $1.1 billion in the previous year.
UBS analyst Erika Najarian rates Bank of America as a “buy” with a price target of 53. She believes the “core story” for the bank remains intact following its quarterly report.
In a January 17 research note, Najarian stated that achieving net interest income targets and demonstrating sequential growth “will of course cement confidence in the outlook.”
Najarian also believes that the company “needs to avoid more upward revisions on expenses.”
Royal Caribbean Stock Analysis
Royal Caribbean (RCL), a cruise line operator, is back within a buy zone above a cup-base entry point of 258.70. This follows a previous breakout above an earlier entry point of 250.11.
MarketSurge analysis indicates that this is a fourth-stage base pattern, which is typically considered less ideal. However, the relative strength line has recently reached new highs, a bullish counter-signal.
RCL boasts a near-perfect IBD Composite Rating of 98 due to its excellent overall performance metrics.
While Royal Caribbean’s overall performance is strong, its Earnings Per Share (EPS) Rating is a more moderate 72 out of 99. However, the company is undergoing a significant turnaround, with earnings growing by an average of 47% over the last three quarters.
The company recently reported a 30% year-over-year increase in EPS to $1.63, exceeding analyst expectations of $1.50. Revenue surged nearly 13% to $3.76 billion, matching expectations. Booking trends also showed acceleration.
Analysts forecast continued strong earnings growth for Royal Caribbean, projecting a 28% increase in EPS for 2025 and 17% in 2026.
Technically, Royal Caribbean stock is very strong, ranking in the top 5% of all stocks in terms of price performance over the past 12 months.
Moreover, it is up more than 14% year-to-date, significantly outperforming the S&P 500 benchmark.
Institutional investors have been net buyers of RCL stock recently, resulting in an Accumulation/Distribution Rating of A.
RCL enjoys substantial institutional backing, with funds currently holding 66% of its shares, according to MarketSurge data.
Royal Caribbean is demonstrating market leadership, currently positioned at the top of the highly competitive Leisure-Services industry group, which itself ranks a strong 25th out of 197 industries tracked by IBD.
Royal Caribbean is also expanding into new markets, announcing the launch of Celebrity River Cruises. Celebrity Cruises, a subsidiary of Royal Caribbean, has placed an order for 10 new river cruise ships, with sailings scheduled to begin in 2027 and bookings opening this year.
“With about half of our guests having experienced or intending to vacation on a river cruise, we know they will enjoy Celebrity’s elevated offering on the river,” said Royal Caribbean CEO Jason Liberty. “By leveraging our valuable loyalty programs across our three brands, we will deepen customer engagement and further our ability to keep guests within our ecosystem of vacation offerings.”
Follow Michael Larkin on X (formerly Twitter) at @IBD_MLarkin for additional analysis of growth stocks.
