Episode summary
3 Hot Growth Stocks to Buy Now
Zacks Market Edge
· · 42 min · Hosts: Tracey Ryniec, Mark Zinski, Neena Mishra, Ethan Feller, John Blank
Summary
The host screened for Zacks number one ranked growth stocks with at least 20% historical EPS growth and 20% projected EPS growth, then used the results to identify three names tied to the biggest growth themes in the market: AI infrastructure and commodities. He argued that the AI buildout is creating a private-sector stimulus similar to a massive public infrastructure bill, with spending flowing into chips, connectivity, power, construction, and cooling.
The first standout was Credo Technology Group (CRDO), a high-speed connectivity company tied to AI networking demand. The host highlighted its strong revenue growth, sharply rising earnings estimates, and expensive valuation, but said the growth justifies the price. He also focused on Sterling Infrastructure (STRL), which builds data centers and distribution facilities and has kept a number one rank even before its next earnings report.
The third pick was Valero Energy (VLO), which the host said looks unusual for an aggressive growth screen but is benefiting from higher oil prices and tighter refining economics. He emphasized that analysts have been raising estimates quickly and that the stock combines low valuation, earnings momentum, and a dividend, though commodity-driven growth could fade if oil prices retreat.
Key takeaways
- The host says the screen is designed to find Zacks Rank #1 stocks with both strong historical and projected EPS growth above 20%.
- Credo Technology Group (CRDO) stood out on AI networking demand, with third-quarter revenue up 201% year over year and earnings estimates rising sharply.
- Sterling Infrastructure (STRL) remains a growth name because it is building data centers and next-generation distribution facilities, even though it already trades at richer valuations.
- Valero Energy (VLO) made the screen because analysts have been rapidly lifting estimates as higher oil prices boost refining earnings.
- The host says commodity stocks and AI infrastructure stocks are both showing up as growth themes, but the commodity trade carries more risk if prices roll over.
Notable quotes
“we want number one ranks. The number one, again, is the top rank. It's the strong buys”
“this is a high-growth stock on sales and earnings. So, earnings earnings expected be up 371% year over year”
“Sterling Infrastructure's got the growth, too. A B for growth, but an F for momentum”
How the episode opens
Stocks, bonds, ETFs, straight out of downtown Chicago. This is Zacks Market Edge. I know many of you are looking for those top stocks as I am, and we give them to you every week here on the YouTube channel, Zacks YouTube channel.
We do the top stock picks of the week. But what about if we just look for those top stocks and we wanted massive growth names? I know you all want them.
You know I'm the value investor strategist here at Zacks, and I'm always looking for the top value stocks, but this week I thought I'd look for the top growth stocks because maybe we can find some with value, but that's not my key focus. These are the areas where something good is going on, and we want to be a part of it, basically. Uh there's a lot going on now in the global economy, in the US economy, but also with the AI revolution.
I have a feeling some of these stocks might be involved in the AI revolution. I've covered a lot of the AI infrastructure stocks on this podcast over the last 3 years, and I'm going to continue to do so because I do believe that that's an area all investors must be in, whether you're a value investor, momentum, income, growth, whatever you are. Uh all of the above, you should be in the AI revolution story.
And it's not limited just to Nvidia and the other chip names. You can get in it in a whole host of areas. Uh all of the infrastructure, construction, um cooling, electricity and power, these are all areas that are seeing quite a boom right now on the earning side and revenue side because of the spending that's going on in the AI revolution.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai infrastructure
- oil stocks
- growth stocks
- stock picking
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Watch “3 Hot Growth Stocks to Buy Now” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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