Bank of America’s research team recently released a selection of stocks they believe have strong potential in the forthcoming earnings season. These firms include Amazon.com Inc. (NASDAQ: AMZN), Brookdale Senior Living Inc. (NYSE: BKD), Corning Inc. (NYSE: GLW), Vertiv Holdings Co. (NYSE: VRT), and Carvana Co. (NYSE: CVNA). Their positioning stems from sector-specific catalysts and company-level developments anticipated to contribute to improved financial performance.
The spotlight on Amazon revolves around its Amazon Web Services (AWS) division. Analysts at Bank of America have pointed out that current market valuations seem to reflect uncertainty regarding AWS’s future trajectory. Should AWS revenue growth accelerate and Amazon enhance its artificial intelligence capabilities, the company’s valuation could expand significantly by 2026. The firm views Amazon as particularly well situated for multiple expansions as it integrates AI more extensively across its operations.
Brookdale Senior Living has been elevated to a buy rating by Bank of America based on its strategic positioning in the senior housing market. The company is expected to benefit from the aging U.S. population, a demographic shift that could drive demand for senior living services. Brookdale’s shares have appreciated by nearly 13% so far this year, and the firm plans to release its earnings report later in February.
Carvana, a player in the used automotive market, is recognized for its innovative business model and recent initiatives such as acquiring physical car dealerships. This strategy is viewed favorably as a growth driver. Carvana’s stock is up about 6% year-to-date, with earnings also scheduled for release in late February.
Corning has been assigned a buy rating as well, with Bank of America highlighting balanced supply and demand dynamics in the glass market, along with moderate price adjustments. Corning stands to gain from a cyclical recovery in carrier capital expenditures and is expected to benefit secularly from the influence of generative AI in the optical communications segment. During the previous quarter, the company demonstrated solid results, including a 14% year-over-year increase in core sales and a 58% rise in enterprise Optical Communications sales, driven by demand for new AI-related products.
Vertiv is projected to experience margin improvement and stronger free cash flow generation shortly, buoyed by demand for its thermal management products. These offerings are increasingly critical as artificial intelligence adoption in data centers grows, prompting greater requirements for efficient cooling solutions. The company’s earnings report is also anticipated in the coming reporting cycle.
The timing of these recommendations coincides with expectations of a robust fourth quarter for the technology sector. Industry commentators have forecasted strong earnings driven by enterprise demand for AI-enabled services from technology leaders including Amazon, Microsoft Corporation, and Alphabet Inc. Similarly, Bank of America’s upgraded outlook for Brookdale reflects a positive stance despite ongoing challenges in healthcare related to regulatory pressures and financial constraints. The expected demographic-driven growth provides a favorable backdrop for the senior housing business.
Bank of America's selections highlight key market trends. In the digital infrastructure space, companies like Corning and Vertiv are positioned to benefit from shifts in technology usage and materials demand shaped by AI development and telecommunications investment. Meanwhile, Carvana's expansion efforts showcase innovation in the automotive sales arena. Collectively, these companies embody a convergence of secular and cyclical forces that could translate into earnings outperformance in the near term.
These insights underline the multifaceted nature of the upcoming earnings season, where breakthroughs in artificial intelligence and demographic shifts are creating differentiated opportunities across sectors.
Key Points:
- Amazon's valuation could improve in 2026 if AWS accelerates growth and AI integration advances.
- Brookdale Senior Living benefits from demographic trends, with stock up roughly 13% year-to-date.
- Carvana's innovative models and acquisition of physical dealerships position it for growth.
- Corning's balanced glass market exposure and AI-driven optical demand underpin its growth prospects.
- Vertiv stands to improve margins and cash flow through AI-related data center product demand.
Risks and Uncertainties:
- Amazon's current valuation includes uncertainty around AWS performance and AI execution.
- Healthcare sector challenges, including regulatory changes and financial constraints, may impact Brookdale.
- Used car market dynamics could affect Carvana's growth trajectory.
- Potential fluctuations in glass supply-demand balance and pricing might influence Corning’s results.
Disclosure: This article includes analysis based on Bank of America's publicly shared outlook and does not constitute investment advice. Investors should conduct their own research and consider risks carefully.