As third-quarter earnings approach, here are the stocks that analysts like - and dislike - the most

By Bill Peters

Earnings Watch: Costco and Micron also report

This summer, shares of Amazon.com Inc., Microsoft Corp. and Nvidia Corp. each took a hit after the technology giants reported quarterly results. But heading into the third-quarter earnings season, they're still among the most-liked stocks by Wall Street analysts.

According to a FactSet report on Friday, both Amazon (AMZN) and Microsoft (MSFT) had the highest percentage of analysts' buy ratings among S&P 500 index companies. Of the analysts who follow those two companies, 95% had buy ratings on both. Nvidia had 94%.

That's perhaps not surprising, given the size of those companies. But the biggest tech players have chafed up against lofty expectations, following an AI-driven run higher for their stocks, and faced concerns about costly investments in the technology and when they'll pay off. Nvidia (NVDA), meanwhile, has faced concerns about delays for its Blackwell chips.

Still, Sebastien Naji, an analyst at William Blair, started coverage of Nvidia last week, with the equivalent to yet another buy rating on the stock.

"Still room on this train," he said.

"The company's long history of pioneering GPU-based parallel computing has laid the groundwork for its current leadership in the world of AI," he said. "Furthermore, Nvidia's move beyond chip design to designing complete infrastructure systems has allowed it to capture an increasing share of IT and data center spending."

Others in the Top 10 list of most buy-rated companies are GE Aerospace (GE), oil giant Schlumberger (SLB), Axon Enterprise Inc. (AXON) - which makes Tasers, body cameras and software for police departments - health insurer UnitedHealth Group Inc. (UNH), Vistra Corp. (VST), United Airlines Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL).

Among those with the most sell ratings? Paramount Global (PARA), where 36% of analysts had sell ratings, the second most, amid merger drama and broader entertainment-industry struggles. Franklin Resources Inc. (BEN), an investment firm, had the highest share of sell ratings, at 44%.

There are 11,882 analyst ratings on companies in the S&P 500, according to FactSet. Of those, 54.5% are buy ratings, with 40.2% hold ratings, while 5.2% are sell ratings, according to the firm.

Results for the third quarter will arrive after the Federal Reserve cut interest rates last week. But analysts say it could take time for the impact to filter through to consumers.

This week in earnings

Car-parts chain Autozone Inc. (AZO) and used-car retailer Carmax Inc. (KMX) report results. So will online styling service Stitch Fix Inc. (SFIX) and ski-resort operator Vail Resorts Inc. (MTN).

Seven S&P 500 companies are set to report quarterly results in the week ahead, according to FactSet.

The call to put on your calendar

Costco: At the beginning of this month, Costco Wholesale Corp. raised its membership fees for the first time in seven years, a move long awaited by Wall Street as demand held up through the past four years of economic upheaval. When the membership warehouse retailer - known for its bulk-sized items, hot dogs and chicken bakes - reports quarterly results on Thursday, we could get an early look at the impact, as consumers continue to struggle with higher prices but turn to the biggest discount retailers for a breather. Wall Street analysts have generally had nothing but good things to say about Costco (COST), with some calling out market-share gains and strength in sales of things that aren't food, which in other retailers have stagnated. But with Costco's stock up 62% over the past year, expectations are high, raising questions about further stock gains.

The number to watch

Micron results: Memory chipmaker Micron Technology Inc. (MU) reports results on Wednesday. To some degree, the results will be a proxy for artificial-intelligence and data-center demand, as well as demand for smartphones and PCs. While the stock is still up some 30% over the past year, it has slumped since June, after its sales outlook disappointed investors.

-Bill Peters

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09-22-24 1001ET

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