These Momentum Stocks Could Extend Their Rally Next Week

The Q3 earnings season is demonstrating strong momentum, with the S&P 500 on track for over 13% earnings growth, marking its fourth consecutive quarter of double-digit expansion. Gold producer Newmont and AI hardware makers Amphenol and Lam Research are standout performers, benefiting from significant analyst optimism and robust stock gains. Newmont's earnings estimates have surged 21% amid rising gold prices, while Amphenol, upgraded by BofA with a $150 price target, and Lam Research are capitalizing on booming AI infrastructure demand, reflecting a broader investor focus on companies with strong fundamentals and exposure to powerful macro trends.

Analysis

The third-quarter earnings season is exhibiting robust momentum, with the S&P 500 projected to achieve over 13% earnings growth, marking its fourth consecutive quarter of double-digit profit expansion. This positive trend, initially bolstered by strong bank results, highlights a market rewarding companies demonstrating both earnings strength and analyst optimism, despite persistent macroeconomic uncertainty.

Newmont (NEM) stands out as a key beneficiary of renewed precious metals enthusiasm, with its average earnings estimate surging 21% over the past three months following 26 analyst forecast raises. Despite an 8% stock dip on Friday due to gold price fluctuations, the company's shares have climbed over 140% year-to-date, supported by gold's safe-haven appeal, central bank purchases, and improving fundamentals cited by UBS with a maintained buy rating.

Similarly, AI hardware makers Amphenol (APH) and Lam Research (LRCX) are experiencing significant tailwinds, with their shares up approximately 80% and 96.5% year-to-date, respectively. This growth is driven by massive demand for AI infrastructure and data center expansion, leading to 21 analyst estimate raises for Amphenol and 29 for Lam Research. Bank of America recently upgraded Amphenol, setting a $150 price target based on strong AI rack demand and M&A activity.

These companies exemplify a broader investor gravitation towards firms that combine strong fundamentals with clear exposure to powerful macro trends, such as gold's safe-haven status and the burgeoning AI ecosystem. The continued upbeat tone of early reports suggests potential for further market confidence and an extended rally into year-end if these trends persist.

Key Decisions for Investors

• Investors should consider increasing exposure to companies with strong fundamental performance and clear alignment with powerful macro trends, such as AI infrastructure (e.g., Amphenol) and precious metals (e.g., Newmont).
• Monitor upcoming earnings reports for Newmont and Amphenol closely for confirmation of sustained operational strength and analyst sentiment, particularly in light of recent gold price volatility and the rapid pace of AI development.
• Evaluate portfolio diversification strategies, as gold continues to be highlighted as a valuable safe-haven asset amidst ongoing global market volatility and central bank purchasing trends.