Meta Stock Leads Five Leaders Near Buy Points as Market Rally Flashes Dark Green

Facebook-parent Metaplatforms (META), GE Aerospace (GE) and Chipotle Mexican Grill (CMG) ranks among the five most important stocks to watch this week as they offer early entries after a bounce off key support. Nexttracker (NXT) and Pinterest (PINS) also make the cut.

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Pinterest stock belongs to the IBD rankings. Pinterest and Chipotle stocks gain a spot on IBD SwingTrader. Other top lists of stocks to buy and watch include the IBD Long Term Leaders list, as well as the IBD 50 list of top growth stocks.

The relative strength lines of four of the five stocks to watch show a strong upward trend over the past year. The exception is Nextracker, although the RS line for the solar stock has risen over the past month. A rising RS line, the blue line in the charts shown, means a stock is outperforming the S&P 500 Index.

The stock market sent a deeper green signal to investors last week, with the S&P 500 and Nasdaq-100 posting new record highs.

Metastock

Shares of parent company Facebook and Instagram jumped 5.6% to 492.96 last week, reclaiming the 50-day and 10-week lines that had served as resistance.

Meta stock's rebound above the 10-week line allowed an early entry into a two-month consolidation, with the earnings gap falling on April 25. The buy point is 531.49. Ideally, Meta would forge a handle to create an official lower entry.

It would be a good sign if the RS line catches up with the stock if it breaks down. The RS line for Meta stock remains well below the all-time high from early April.

Meta is one of the Magnificent Seven that has fueled the market's recovery from late 2022 lows.

The social media giant released its first quarter results on April 26. Year over year, Meta's earnings rebounded 117% per share while sales soared 27%, marking the strongest revenue growth in more than two years. Meta also reported a new investment cycle, driven by artificial intelligence, leading to a strong sell-off in volume the week of April 26. Meta investment cycles tend to weigh on stock prices.

On a per-share basis, Meta's earnings have rebounded 73% in 2023. Analysts expect 36% growth this year, slowing to a 15% gain in 2025. Sales are expected to increase 18%, respectively. and 13% in 2024 and 2025.

Meta earns an IBD Composite Rating of 98 and an EPS Rating of 97, both out of the best 99 possible. An RS Rating of 94 means it has outperformed 94% of all stocks in IBD's database over the past year.

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GE Aerospace shares

Shares of the new pure-play aerospace company fell slightly for a second straight week, but found support at the 10-week moving average. GE stock is looking at a 170.80 buy point from a new flat base, still 6% below the entry. This is up 72% from a previous flat-base breakout last January, MarketSurge pattern recognition shows.

The consolidation occurred in lower than average volume after significant upside buying.

GE stock has an IBD Composite Rating of 97, an EPS Rating of 77 and an RS Rating of 96.

On April 23, the company reported a 281% increase in first-quarter EPS on the back of an 11% sales rebound. The results include those of the new GE Vernova (GEV), which is now a standalone company like GE Aerospace following the final two-way split of the former GE in April. GE Aerospace's revenue alone increased 15% in the first quarter.

Analysts expect earnings growth of 81% in 2024 and 25% in 2025.

Chipotle Broth

Shares of burrito chain Chipotle Mexican Grill rose 1.3% after three weeks of declines, rebounding from the 10-week line. The stock is actionable from the 10-week rebound as well as a break of the downtrend line from the April high.

CMG stock needs another week to forge a flat base with a traditional buy point of 3,260, which also marks the May 10 record high.

Chipotle stock holds an IBD Composite Rating of 99, an EPS Rating of 98 and an RS Rating of 94.

On April 25, the company revealed that its profits soared 27% in the first quarter and sales rose 14%. This is the second consecutive quarter of accelerating profit growth.

Chipotle reported 37% profit growth in 2023. Analysts forecast 24% profit growth this year, slowing again to a 20% gain in 2025.

Chipotle shareholders on Thursday approved a 50-for-1 stock split that was approved by its board months ago. The split will take place later this month.

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Nexttracker Stock

Solar energy stocks rose 0.9% for the week, extending their late May rally above the 10-week line. MarketSurge shows Nextracker stock in a cup-with-handle base with a 58.49 buy point.

The base cup with handle saw a 28% jump in volume the week of May 24. This follows strong profits the previous week. However, much of the base has formed below the 10-week line and even the 200-day line, a negative sign.

Nextracker will join the S&P MidCap 400 index before opening on June 24, S&P Dow Jones Indices announced Friday evening. NXT stock rose slightly Friday night.

Notably, Nextracker shares have held up well in the solar stock sell-off in 2023. In 2024, solar stocks as a whole have returned to form, currently ranking 14th out of 197 industry groups tracked by IBD.

Nextracker stock holds an IBD Composite Rating of 99, an EPS Rating of 98 and an RS Rating of 86. The near-perfect EPS Rating of 98 is among the highest in the group of solar stocks.

On May 15, the solar company reported a 151% increase in EPS for its fiscal fourth quarter as sales increased 42%.

On a per-share basis, Nextracker's profit nearly tripled in the fiscal year ending March 2024, increasing 192%.

Analysts are forecasting a 2% drop in profits for the current year and a 13% rebound for next fiscal year. Sales are expected to grow by 15% and 13% over these respective periods.

The company provides software and monitoring technologies for global solar projects. Using Nextracker's tracking tools, solar panels can track the movement of the sun and increase energy production.

Pinterest Stocks

Shares of the social media company rebounded for a second straight week, jumping 6.3% to 44.11. Over the past week, Pinterest stock has rebounded from the 21-day short-term line to reclaim a 41.60 buy point. On Friday, the stock crossed the top of the buy zone, which is around 43.61.

The base of the cut shows a profit distribution gap of 21% in huge volume the week of May 1st. After entering the buy zone, shares pulled back to the 21-day line in late May.

Pinterest stock holds an IBD Composite Rating of 99, an EPS Rating of 98 and an RS Rating of 94.

On April 30, the company revealed a 150% rise in first-quarter EPS on the back of a 23% revenue increase. Sales growth accelerated for a fifth consecutive quarter and accelerated sharply from the previous quarter's 12% gain.

On a per-share basis, Pinterest's earnings growth rebounded 76% in 2023 after a sharp decline the previous year. Analysts forecast earnings growth of 33% in 2024, then slowing again to a 23% increase in 2025.

Notably, the Pinterest platform continues to gain ground among a sought-after group of American consumers: Generation Z, young Americans entering the job market in greater numbers.

“We continue to win with Gen Z,” Bill Ready, Pinterest's chief executive, said during the company's first-quarter earnings conference call. “They represent more than 40% of the platform’s users and are our largest and fastest growing demographic.”

The Pinterest app allows users to search, save, and purchase ideas for food, fashion, and home decor.

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