Bank of America flags 3 breakout stocks to watch ahead of earnings originally appeared on TheStreet.
With earnings season heating up, Bank of America just highlighted three breakout picks that could turn heads.
It’s important to understand that Wall Street is entering its busiest stretch, and all eyes are on the household tech giants. However, some analysts like BofA are quietly flagging stocks that could catch investors off guard.
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Amazon’s (AMZN) is a usual suspect, but AppLovin (APP) and Oddity Tech? That’s a curveball. It’s clearly an unexpected trio, but the reasoning behind the call might be exactly what investors need to hear at this point.
With market expectations sky high, understanding BofA’s reasons for doubling down on the three stocks offers a sharper lens into what matters most this quarter.
Big Tech continues hogging the spotlight, as the Magnificent 7 guides the broader market through a crucial stretch of the earnings season.
The show opened with a mixed act.
Google blew past expectations, posting a 14% revenue bump to $96.43 billion and $28.2 billion in net income, on the back of a 32% leap in Google Cloud.
Related: Veteran analyst drops 3-word verdict on Tesla post-earnings
That level of strength led management to bump its 2025 capital expenditures target to $85 billion.
Tesla, meanwhile, edged past estimates on both sales ($22.5 billion) and EPS ($0.40), despite a 12% YOY decline in deliveries. The sales drop revived investor chatter over Elon Musk’s AI-and-Robotaxi pivot and its long-term payoff.
Nevertheless, the broader trend looks mostly intact.
More than 80% of S&P 500 companies topped forecasts on both sales and profits, per FactSet.
Moreover, the Mag 7 is expected to race past its peers, delivering an estimated YOY earnings growth topping 14%, compared to just 3.4% for the rest of the index.
Now, the second wave begins.
Apple, Amazon, Microsoft, and Meta will take the center stage this week, with high expectations.
Collectively, these giants account for about 20% of the total U.S. market cap and over a third of S&P 500 earnings.
Consensus estimates peg Apple’s numbers at $89.1 billion in sales and $1.42 EPS. Amazon is expected to post $162 billion in sales.
Also, Microsoft could deliver $73.8 billion in sales and $3.38 per share earnings, while Meta is forecast at $44.8 billion and $5.87 EPS.
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With a Fed decision, jobs data, and tariff decisions all looming, these earnings will likely set the tone for the stock market.
Typically, Q2, spanning April through June, has been more of a reset period for Big Tech.
It sits between the highs of the holiday-driven Q4 and the optimism of a fresh fiscal Q1. Hence, growth rates tend to decelerate with consumer spending cooling post-winter and enterprise tech budgets settling into the year.
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For Apple, that usually results in a softer iPhone demand after the launch season, with Mac and Services stepping in to balance the likely drop.
Google and Microsoft often lead the charge with their double-digit cloud revenue sales, though Q2 typically is a slowdown from Q1’s AI-fueled capex bursts.
Meta, meanwhile, sees some pullback in ad budgets as marketers recalibrate, which makes cost discipline incredibly important.
But the old Q2 playbook may be breaking.
AI adoption has been an amazing tailwind in a historically tepid quarter. The expansion of generative AI, from foundational models to smarter analytics, continues pushing enterprise momentum.
At Google Cloud and Microsoft Azure, this effectively leads to growing cloud demand and fresh rounds of server and GPU investment.
For Apple, layering AI into iOS and macOS is directing more users into Services. And Meta’s AI-powered ad tools are helping brands get better traction and spend more efficiently.
The result is that Q2 now brings more upside potential than seasonal softness.
Bank of America is leaning on a mix of tech and consumer momentum stocks ahead of a pivotal earnings season.
In a fresh note, BofA analysts highlighted three standouts that could see a catalyst in the coming weeks.
Moreover, the firm is betting on robust fundamentals, scalable business models, and potent growth narratives. Oddity Tech, AppLovin, and Amazon each bring something different and unique to the table.
Let’s break down why these three made the list.
BofA analysts are seeing strength in Amazon’s powerful retail engine heading into earnings.
While AWS continues to dominate the headlines, analysts contend that the real story lies in its wider e-commerce ecosystem and juggernaut-like positioning in digital advertising and devices.
The firm believes Amazon’s customer-first strategy continues to pay off, especially as macro tailwinds stabilize.
Also, BofA expects AWS growth to continue accelerating at the back end of the year, giving investors potentially double upside from cloud and retail.
AppLovin is also getting the love from BofA analysts, due to the expansion of its managed service onboarding and self-serve ad tools.
If both take hold, EBITDA estimates for 2026 could move a lot higher.
Additionally, the stock’s been gaining steam in recent months, on the back of renewed faith in its AXON ad engine.
With momentum building and BofA holding a Buy rating, AppLovin is shaping up as one of the more under-the-radar stories this earnings season.
Oddity Tech is a digital cosmetics player with a robust direct-to-consumer model, and BofA likes what it sees.
Nearly all sales go through its own channels, giving it immense over margins, experience, and brand loyalty.
Also, the firm just bumped its price target to $80 (a 17.6% jump from current prices), citing strength in Oddity’s proprietary recommendation technology.
With beauty trends moving fast, analysts think Oddity has room to grow even after a breathtaking start to the year.
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Bank of America flags 3 breakout stocks to watch ahead of earnings first appeared on TheStreet on Jul 28, 2025
This story was originally reported by TheStreet on Jul 28, 2025, where it first appeared.