3 Stocks to Buy in February

Amazon is highlighted for robust earnings growth and operational efficiency, with AWS positioned to benefit from agentic AI deployments in 2026 after gaining momentum in Q3, though the stock has underperformed the S&P 500 over the past 12 months. BeOne Medicines—up over 50% in the last year—fields blockbuster Brukinsa with rising U.S. and European sales, has Chinese approval for sonrotoclax in R/R MCL and R/R CLL/SLL, awaits U.S. approval, and may file for accelerated approval of BGB-16673 pending positive Phase 2 data. Enterprise Products Partners offers a 6.6% forward distribution yield, 27 consecutive years of distribution increases, and could see higher natural gas demand from new AI data-center construction driving pipeline volumes.

Analysis

Market structure: Amazon (AMZN) and AWS are primary beneficiaries of an agentic-AI cycle in 2026 — expect AWS revenue growth to outpace overall cloud by ~5–10 percentage points as enterprise agent deployments scale. Midstream energy (Enterprise Products Partners, EPD) is a clear winner if AI-driven data center buildouts lift U.S. natural gas demand; the market should re-rate LP multiples if incremental gas volumes exceed ~1–2 Bcf/day over 12–36 months. BeOne (ONC) is a binary biotech winner if U.S. approvals/accelerated filings land; smaller oncology peers lose share if Brukinsa/sonrotoclax maintains label expansion.

Risk assessment: Tail risks include an FDA denial or delayed filing for ONC (binary -100% to +200% swing), a near-term AWS margin miss from price competition (>5% EPS downside in quarter), and a macro-led reduction in gas demand if data-center electrification favors grid power (risk to EPD if gas demand CAGR <1.5% next 3 years). Immediate time windows: AMZN earnings (days), ONC regulatory readouts/filing windows (30–90 days), EPD demand realization (12–36 months). Hidden dependency: sustained high U.S. rates compress LP coverage ratios and capex-funded growth if funding costs rise >200bps.

Trade implications: Tactical direct plays — establish a 2–3% long in AMZN targeted to +25–35% over 12 months with an -8% stop; fund with a 0.5–1% short-term call sale program (monthly). Buy EPD size 3–5% for yield (6.6%), target 10–15% total return over 12 months and sell 1–3 month covered calls to add 2–4% annualized. Take a small 0.5–1% speculative position in ONC via OTM calls (60–120 day expiries) ahead of catalyst; cap loss at full premium.

Contrarian angles: The consensus underprices two risks — AWS margin compression from aggressive Google/Microsoft pricing and faster-than-expected data-center electrification reducing gas growth. If AMZN EPS guidance misses by >5% this week, expect a 10–15% repricing; conversely, if AWS guidance beats by >3–4%, AMZN could gap +12–20%. For EPD, require concrete incremental offtake contracts or a sustained >2% CAGR gas demand signal before upping allocation above 5%.

Key Decisions for Investors

• Establish a 2–3% long position in AMZN within 48 hours ahead of earnings; hedge by selling 1–3 month calls (collect premium) and set a tactical stop-loss at -8% and a 12‑month target of +25–35% if AWS guidance shows AI-driven acceleration (>3% beat).
• Allocate 3–5% to EPD for income (forward yield ~6.6%); implement a covered-call overlay (monthly expiries) to generate incremental 2–4% annualized income and plan to add more only if quarterly natural gas throughput shows a 3‑quarter trend >3% YoY.
• Take a small, high-conviction speculative position in ONC (0.5–1% portfolio) via OTM calls (60–120 day expiries) ahead of FDA filing/Phase 2 readouts; risk only option premium and exit fully on negative regulatory signals or if share gains >100% post-catalyst.
• Short-volatility/earnings conditional: buy an AMZN straddle if implied vol exceeds realized 30‑day vol by >8 percentage points for the earnings week, otherwise deploy a directional LEAP call (12 months, ~delta 0.35) financed by selling 3 monthly calls to improve carry.
• Do a conservative pair: overweight AMZN vs. underweight mid-cap cloud peers with weaker margins (size net exposure +1.5% portfolio); rebalance if AMZN EPS guidance misses by >5% (trim longs) or if peers report margin expansions narrowing the spread.