3 Stocks to Watch for the Week of May 30, 2023

The S&P 500 finally closed above the 4,200 mark last Friday, though the standout performance of NVIDIA – a stock I told you to pay attention to last week – no doubt had something to do with it.

Still, the fact that the market was able to breach this psychological barrier is a good sign. Whether it’s able to hold this line, and more importantly – flip it from a resistance level to a support floor – is another question entirely.

The good news is that with the debt ceiling standoff looking very close to finally being resolved, the market should have a strong impetus to continue its move higher.

With that being said, here are three stocks I think you should be paying attention this week – and why. Obviously, I can’t promise another NVIDIA – but who knows?

Salesforce, Inc. (CRM)

Salesforce is reporting earnings this week (after Wednesday’s close to be specific), and analysts are expecting earnings-per-share of $1.50 which would be an increase of 53% year-on year – despite topline revenue only expected to grow by about 3% to $7.6 billion.

Should Salesforce top these consensus estimates, we can expect this stock to pop. Beyond that, there are also other good reasons to consider this stock.

For one, its integration of Slack seems to be going well – which could potentially fuel major collaboration deals. Then there’s the red-hot AI catalyst. Back in March, Salesforce unveiled “Einstein GPT” – generative AI that can deliver AI-created content through its platform.

And while that release was already factored into its stock price (up 60% year-to-date), the AI revolution is still gaining steam – meaning the price gains from this catalyst could only just be beginning. WIth a price-to-sales ratio of just over 6x, Salesforce could still have plenty of room to run.

Chewy, Inc. (CHWY)

Another company reporting earnings tomorrow is online pet food retailer Chewy. And while the stock might see a pop should it beat the consensus, I would encourage a slightly longer-term view on this stock.

One is the broader industry, with the pet industry expected to hit $277 billion by 2030. Chewy’s revenue itself has doubled over the past 3 years, showing its ability to capture an ever-larger portion of this market. Its profit margins have also been increasing.

Second, the company has also been pushing into different niches within the pet industry, such as pet health and insurance – providing additional catalysts for growth.

And third, because the company’s stock price is down about 14% on the year, it’s currently trading at under 1.5x sales. This could be a good opportunity as the company executes on its longer-term vision.

The Trade Desk, Inc. (TTD)

Programmatic advertising titan The Trade Desk has already reported earnings – and it crushed expectations. Earnings-per-share came in at $0.23 versus the consensus of $0.13, a massive difference. This marked the third time over the past four quarters that The Trade Desk delivered a positive earnings surprise.

The programmatic advertising market itself also has a lot of growth potential – expected to post an impressive 32% annual growth over the next 5 years and generate a total of $2.7 trillion in revenue. Throw in the company’s use of AI to help its clients improve their return on advertising spend, and The Trade Desk is likely just getting started.

Despite The Trade Desk’s impressive stock performance, based on analysts’ price targets, it looks like there’s still plenty of upside left in this programmatic advertising giant.

To your wealth,
Felix @ Ace of Investing